The ACD Method

[Robert Yanks]

I was curious to get some perspective on how others would score particular days. 1) How would you score a day that makes a confirmed A-up, later trades below the OR to make a C-down, but then closes above the A-up? 2) How would you score a day that makes an A-down, trades above the C-up, but fails (due to limited time), trades back below A-Down, but later makes a C-up and closes above the OR? I know there are nuances here, but was just curious generally speaking. Thanks

Hello trader31,

The first rule of NL fight club is: Anything in the OR is a zero. Figures 4.14, 4.15, 4.18, 4.19, and ½ of 4.21 are incorrect (this was confirmed to me from a Fisher rep). That is, they closed in the OR and that’s always a 0.

With the above in mind, here’s the simple rule, in my words, to deal with your examples: When you get a confirmed C in one direction, and then price crosses back through and out the OR in the opposite direction, it’s a “Point D” and the daily NL is a zero.

From Fisher’s book:

“Point D is the price at which your bias shifts to neutral and is your stop after the market has already established a C in of direction. Once Point D has been hit, the trader has been chopped up enough for the day and should walk away from that market for the rest of the trading day.”

Your first example is a NL zero. After making a C Down price crossed back through the OR and hit the D Point.

Your second example is a +4. After making a C Up price stayed above the OR until the close.

 

[Robert Yanks]

Many of the broad market ETF’s had piss poor performance for January.

A few bright spots:

Bio Tech Sector (IBB) is was up 6.03%
Real Estate sector (IYR) is up 5.71%
Gold (GLD) and Silver (SLV) both up over 8.5%
20 + year bonds (TLT) have just kicked ass for the last 12 months. Up 9.82% in January.

 

[trader31]

Hello trader31,

The first rule of NL fight club is: Anything in the OR is a zero. Figures 4.14, 4.15, 4.18, 4.19, and ½ of 4.21 are incorrect (this was confirmed to me from a Fisher rep). That is, they closed in the OR and that’s always a 0.

With the above in mind, here’s the simple rule, in my words, to deal with your examples: When you get a confirmed C in one direction, and then price crosses back through and out the OR in the opposite direction, it’s a “Point D” and the daily NL is a zero.

From Fisher’s book:

“Point D is the price at which your bias shifts to neutral and is your stop after the market has already established a C in of direction. Once Point D has been hit, the trader has been chopped up enough for the day and should walk away from that market for the rest of the trading day.”

Your first example is a NL zero. After making a C Down price crossed back through the OR and hit the D Point.

Your second example is a +4. After making a C Up price stayed above the OR until the close.

Thanks, ignl and robert, I appreciate the help.

 

[redbaron1981]

Hi Guys,

This is my first post in the thread and I am completely new to method besides reading the book and this thread as many times as I can bear it.

Just a quick question. I have been recording my number lines over quite a few FX pairs to try to see the ebbs an flow that Maverick talks about. I know that it is highly unlikely for anybody to have the same NL values as me but I am showing a -35 on the Euro at the moment which is probably to be expected looking at how much the pair has been crushed lately, however does a -35 not sound a little to big? Maybe it just because all the talk i hear about the NL's involves them passing +9 -9 levels.

I'm probably worrying about nothing but just thought I'd try to get some clarification from the more experienced guys to be sure.

Thanks.

 

[trader31]

Hi Guys,

This is my first post in the thread and I am completely new to method besides reading the book and this thread as many times as I can bear it.

Just a quick question. I have been recording my number lines over quite a few FX pairs to try to see the ebbs an flow that Maverick talks about. I know that it is highly unlikely for anybody to have the same NL values as me but I am showing a -35 on the Euro at the moment which is probably to be expected looking at how much the pair has been crushed lately, however does a -35 not sound a little to big? Maybe it just because all the talk i hear about the NL's involves them passing +9 -9 levels.

I'm probably worrying about nothing but just thought I'd try to get some clarification from the more experienced guys to be sure.

Thanks.

I am by no means an authority here, but for what it is worth i am at -36 on Euro (using a 20 min OR with london open).

 

[redbaron1981]

That sounds good. I must have done something right for once

Thanks.

 

[redbaron1981]

Just scanning my charts and on the USDCAD you can see exactly what Fisher drew on the whiteboard when talking about the fire in the theatre. 3 consecutive A up's followed by a very big A Down today. Also the Pivot ranges had contracted a lot today was the smallest in 3 days and was also a small OR compared with previous days.

Not sure what the catalyst was today but that would have been a nice move to get into and something to look out for. The AUDJPY is meeting those conditions at the moment.

 

[ignl]

Just scanning my charts and on the USDCAD you can see exactly what Fisher drew on the whiteboard when talking about the fire in the theatre. 3 consecutive A up's followed by a very big A Down today. Also the Pivot ranges had contracted a lot today was the smallest in 3 days and was also a small OR compared with previous days.

Not sure what the catalyst was today but that would have been a nice move to get into and something to look out for. The AUDJPY is meeting those conditions at the moment.

CAD follows oil and it rallied a bit in the last few days. AUD cut interest rates unexpectedly. Forex is huge market and "pants down" matter less here than in highly leveraged futures. I also follow such trades, but usually would need something else than just single reversal signal to act. I also would like to see close lower than A up on first day (I just look for 2 days A ups, one day A down), but that's just me. Sometimes such signals can be spectacular (I had something like that for AUDUSD @2014-09-08 for example @~0.93) unfortunately closed my short very fast As for CAD its hard to say if it could signal real reversal, I personally think its not time yet (or at least would like to see some consolidation first), but it more depends on oil, so it can change fast. Also USDCAD made weekly A down. This is strong.

 

[Robert Yanks]

Many of the broad market ETF’s had piss poor performance for January.

A few bright spots:

Bio Tech Sector (IBB) is was up 6.03%
Real Estate sector (IYR) is up 5.71%
Gold (GLD) and Silver (SLV) both up over 8.5%
20 + year bonds (TLT) have just kicked ass for the last 12 months. Up 9.82% in January.

One of the really insightful additions to ACD is Mav's monthly number. As you know it washes away the chains from the previous month and starts fresh the first day of the month. Tonight, just two day's into February, 10 of the 38 ETF's on the attached are short term positive. Now that's cool.

 

[Robert Yanks]

The first week of February was fairly impressive in the broad market ETF’s.

11 Monthly A Ups in total, and some of those with very impressive short term NL’s: Dow 30 (DOW), Midcap 400 (IJH), Midcap Value (IJJ), Smallcap Index (IJR), Smallcap Value (IJS), Smallcap Growth (IJT), S&P Value (IVE), Telecom (IYZ), Copper (JJC), Regional Banks (KRE), Materials (XLB), Financials (XLF), Consumer Discretionary (XLY).

Monthly A Downs in the usual suspects when the above occurs: Gold (GLD), 10 Year (IEF), 3 Year (SHY), 20 Year (TLT).