The ACD Method

Good post RB,

I enjoy reading posts like yours and hope more folks chime in.

Like I've always said about currencies "Most of you guys have probably heard me say on here countless times, follow the money. Even if all you trade is oil or spoos, follow the money. The demand ALWAYS begins with the currency. Why? Because that is the unit in which your product is being bought. You may not realize this but when you buy AAPL, you are shorting the USD at the same time. Why? Because your trade actually looks like this: AAPL/USD. You are funding your purchase your AAPL shares with dollars. Most people won't notice this much of course because the price volatility in AAPL far outpaces the volatility in the Dollar."

Ohhhhhhh ..... I had a Brian Williams moment there. Perhaps I didn't say that. :)
 
LOL RY,

Heres another from the early 700's :-)

"I have said this before and I will say it again. I don't care if you guys never trade a currency in your entire life, for the love of God, please watch them. Every major move in the last 200 years has been preceded by action in the currency markets. Your trading will improve immensely if you start to watch and track what's going on in currencies. I absolutely promise you that. I can't think of a single macro hedge fund manager that I respect that does not watch them like a hawk. And yes, I track the number lines on all the currencies."

This thread reminds me of the book "Trading and Exchanges: Microstructure for practitioners" By Larry Harris.

The book is 656 pages long and filled with lots of deep and meaningful insights. My biggest problem being how does one take in and remember such a vast quantity of information. I always find myself remembering statements that I find "useful" far more easier than the ones that contain the normal trading forum dribble.

I'm not religious at all and hold nothing against those that are but the religious folk seem to have the amazing ability to repeat and quote page and paragraph of references from the bible. Perhaps this is from the constant study and rereading of the bible on a regular basis.
This is quite a useful skill and something that would be very useful if applied in the context of this thread. Maybe we should be using this thread as our "Bible" and in doing so continue rereading/studying on a regular basis until all is greatly remembered and ready for use..

Anyway thats enough of my thoughts for post. I do hope to start following more products and will do my best to contribute to useful discussion on this thread.
 
redbaron1981 said:
Thanks for the Number Lines RY,

I've been keeping track of quite a few fx pairs. All the pairs in the EUR group seem to be turning from negative to positive. With all the developments in the EZ at the moment there appear to be a lot of traders mid to longterm short on the EUR but the number lines not really agreeing to it.

The USD appears to be weakening across the 30 day NL's. YEN seems to be strengthening and the Swissy seems to be bouncing around a lot.

As mentioned with the Euro if the number lines keep strengthening we could start to see those shorts becoming squeezed some what.

I am to ACD land but thought I would contribute my 5 cents for feedback. It would be real nice to get some momentum in this thread again.
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I think Maverick said here before, that 30d numberline strengthening or weakening doesn't mean much, it is more useful for trying to identify trends early. Lets say some product was dropping for quite some time, then consolidated for a month and then first time in a while it confirmed +9 numberlines 2 days in a row. That's something. Couple it with made weekly A up and it's possible trade. Because it drops some old values 30d strengthening or weakening doesn't really tell you much. Having said that my NLs is still strong for USD and rather weak for EUR. I find GBP really interesting now regarding numberlines and would use it as long instead of EUR.
 
Hi ignl,

I believe your correct in saying that its not just the number lines and that its more a culmination of many factors to reinforce your trading idea, However I do take in mind this one little snippet from Maverick.

"But ALL my trading decisions are number line based. Not on sentiment."
Jun 23, 2013

So they are quite important in the decision making process.
 
trader31 said:
Question for people who track futures numberlines (e.g. oil). When the contract rolls over - like Oil has moved from March to April last week, will you just continue the 30-day numberline from March with the April contract or go through the exercise of scoring April independently back 30 days? Seems like it should be fine to just continue with March, but wanted to see what others do. Thanks
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For some futures that I track automatically, I just continue next month. However if you think a bit about it, it probably depends. If different months represents strong seasonality and you trade futures spreads, maybe its better to follow each contract separately. For something big and liquid like CL I guess its fine just continue into the next month. Just my 2 cents.
 
redbaron1981 said:
Hi ignl,

I believe your correct in saying that its not just the number lines and that its more a culmination of many factors to reinforce your trading idea, However I do take in mind this one little snippet from Maverick.

"But ALL my trading decisions are number line based. Not on sentiment."
Jun 23, 2013

So they are quite important in the decision making process.
More...
Sure, for me too.
 
ignl said:
For some futures that I track automatically, I just continue next month. However if you think a bit about it, it probably depends. If different months represents strong seasonality and you trade futures spreads, maybe its better to follow each contract separately. For something big and liquid like CL I guess its fine just continue into the next month. Just my 2 cents.
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Thanks, good point on the seasonality.
 
I was curious how others score a failed A down followed by a failed A up and then a confirmed A down. I was debating -3 vs. -2 and had reasonable arguments for both. Any thoughts? Thanks
 
I would say if it failed as in it never breached the level I would give it a -2 if it failed the first A up and A down due to not enough time spent beyond the levels I would call it a 0 day. Don´t take my word on this as I am extremely new to this.
 
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