The ACD Method

copyplus said:
FWIW it was this post that got me thinking of that...
http://www.elitetrader.com/vb/showpost.php?p=3318447&postcount=767

But since the number line drops older values, it will always be a sum of the last N days. I was thinking as if it were a cumulative number line because in that case the starting point would effect the total.
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I toyed with that idea of having "cycle" number lines. I never did much with that research but it was the idea of "matching" a number line to a specific A level. I do that with the monthly number lines for example. They are not rolling, they are static. So the number line matches up well with the actual monthly A levels. The weekly levels are too short for that and the QTR levels are too long. If you have a fixed period for N then using static number lines can work well. The rolling number lines are not fixed and they exist independently of all the A levels. Hope that helps.
 
Maverick74 said:
I toyed with that idea of having "cycle" number lines. I never did much with that research but it was the idea of "matching" a number line to a specific A level. I do that with the monthly number lines for example. They are not rolling, they are static. So the number line matches up well with the actual monthly A levels. The weekly levels are too short for that and the QTR levels are too long. If you have a fixed period for N then using static number lines can work well. The rolling number lines are not fixed and they exist independently of all the A levels. Hope that helps.
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Thanks excellent, if you rest to 0 that can be more of a significant meaning in terms of market direction/volatility... ? How about a 14 period or maybe 9
 
trilogic said:
Thanks excellent, if you rest to 0 that can be more of a significant meaning in terms of market direction/volatility... ? How about a 14 period or maybe 9
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No, there is no significance in re-setting it to zero. The purpose of the re-set is only to synchronize it with the corresponding A levels. In the same way I use the 5 day rolling to either confirm or reject a monthly trade signal. The number line is not a moving avg, in fact it's not an avg at all, it's a cumulative value. Statistically speaking you could say it represents density.
 
Maverick74 said:
No, there is no significance in re-setting it to zero. The purpose of the re-set is only to synchronize it with the corresponding A levels. In the same way I use the 5 day rolling to either confirm or reject a monthly trade signal. The number line is not a moving avg, in fact it's not an avg at all, it's a cumulative value. Statistically speaking you could say it represents density.
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with respect to reset do you still use +9/-9 ?

With a 5 day number line would I not have to use a different threshold?

I like pivots both long and short term, however I am struggling with number line however I think its a great way to review price other than a chart to determining a trend... actually its much better "density" as you say
 
trilogic said:
with respect to reset do you still use +9/-9 ?

With a 5 day number line would I not have to use a different threshold?

I like pivots both long and short term, however I am struggling with number line however I think its a great way to review price other than a chart to determining a trend... actually its much better "density" as you say
More...

The rolling 30 day number line re-sets at zero in terms of ending a confirmation trade. So if bonds confirmed and two months later the 30 day re-set at zero, the confirmation would be null and void now awaiting the next confirmation. The 5 day does not re-set at the zero line. It triggers at +/- 5 thresholds. It serves a different purpose then the 30 day.
 
Maverick74 said:
The rolling 30 day number line re-sets at zero in terms of ending a confirmation trade. So if bonds confirmed and two months later the 30 day re-set at zero, the confirmation would be null and void now awaiting the next confirmation. The 5 day does not re-set at the zero line. It triggers at +/- 5 thresholds. It serves a different purpose then the 30 day.
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ok thanks

Looking at 3,5 and monthly pivots ranges relative to price a likely number line to go in conjunction with these pivots would maybe be a 5 day I think ?

The reversal trade mark talks about is real interesting trade to look out for as well, buying when it feel wrong but yet makes most sense given price action, catching longs or better shorts having to get out...
 
I've read the advice given in the past on here to set your OR size and A values such that they complement your trading style (breakout or fading) and the logic of it makes sense to me. But that is for the levels you trade off. Is there any similar advice regarding the OR size and A values you use to construct your number line? I'm going back to the start of the year and calculating NL's for several instruments and am considering running the numbers on 2 or 3 diff OR sizes to see if one looks better than the others, so wondering if anyone had any tips.
 
Maverick74 said:
The rolling 30 day number line re-sets at zero in terms of ending a confirmation trade. So if bonds confirmed and two months later the 30 day re-set at zero, the confirmation would be null and void now awaiting the next confirmation.
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I think this explanation of when it is null and void is important. It is all too easy to think of a confirmation as an entry signal, when that is really not the case.

I'm quite happy to take a trade at 15 or 20 number line value when I get an entry signal.
 
justrading said:
I think this explanation of when it is null and void is important. It is all too easy to think of a confirmation as an entry signal, when that is really not the case.

I'm quite happy to take a trade at 15 or 20 number line value when I get an entry signal.
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Thanks. I want the number line to confirm what I see, just matter of preference with respect to time of number line 5 10 15 20 what have you. If I get a long on some short term calculations and the 5 day number line is -1 I will wait and not go long and certainly not short..



I think what I am am after is what is a good mix. If you are day trading your not looking too much at a 20 day number line...but you may take a look at the 10 day and see if its nearing 5 or 9 or something..
 
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