Maybe I can help refine your questions to be more specific and prompt more discussion on this interesting subject. Spreads (in the context of trading one product against another) generally fall into one of five categories: 1) Seasonal, 2) Relative Strength, 3) Mean Reversion, 4) Volatility [options], and 5) Dispersion [options]. Seasonal spreads typically involve futures on products with seasonal cycles of supply and demand (e.g., agriculturals, energies). Joe Ross and MRCI specialize in seasonal spreads. Mean Reversion spreading is also known as pair trading or stat arb and is covered ad nauseum in books and online articles. Volatility and Dispersion spreading involves disparities in option premiums on correlated products.
ACD lends itself more to Relative Strength spreads, so let's focus on Relative Strength and exclude the others. You can use ACD in conjunction with price action or other techniques to identify stronger vs. weaker markets and spread trade them in a long/short market-neutral way where you profit when the spread widens.
With regard to ACD and Relative Strength spreads, some related topics that others may wish to comment on are: 1) the execution strategy using outrights or options, and 2) applying ACD analysis to the individual long and short components of the spread versus the spread ratio itself, and 3) references to any hedge funds or other major players who employ this strategy (a good indicator of its viability).
ACD lends itself more to Relative Strength spreads, so let's focus on Relative Strength and exclude the others. You can use ACD in conjunction with price action or other techniques to identify stronger vs. weaker markets and spread trade them in a long/short market-neutral way where you profit when the spread widens.
With regard to ACD and Relative Strength spreads, some related topics that others may wish to comment on are: 1) the execution strategy using outrights or options, and 2) applying ACD analysis to the individual long and short components of the spread versus the spread ratio itself, and 3) references to any hedge funds or other major players who employ this strategy (a good indicator of its viability).
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