The ACD Method

[justrading]

We've had that number line issue raised before. The 30 day basically keeps you on the right side of the market for the most part, the 5 day highlights shorter term momentum.

Where the 30 day is superb is when price is in a base, ie a narrow range for a prolonged period, and is about to break out. If you look back, some of the awesome signals Mav shared were for instruments in exactly that sort of price pattern, the most recent being X.

I've had the 5 day signal resumption of a move after a few days of consolidation. Move, consolidation, could go either way then the 5 day signaled negative.

The number lines will lag severely in V shaped reversals, there's no denying that. Pretty much any indicator you look at will signal direction faster than the number lines. If you are the type who happily trades every little swing, trend and counter trend, then they wouldn't be of much use to you.

 

[wow12]

i agree with majority of what iustrading pretty much has suggested , so at the heart the number line break down to simple holistic perspective that is based on the principle of buying strength and selling weakness (theirs varying degrees of strength and weakness trends offer). you can have confirmations on negative number-lines

Your job as the trader (take my opinion with pinch of salt) is understand the condition in which you are operating and creating the most favorable approach to that instrument( how you do this is really up to the trader) to try to reduce risk which comes in form of both monetary loss and also economic loss i.e time whilst increasing your returns.

where i differ from justrading is i don't believe that the number lines are lagging indicators rather i can argue that their forward looking but you don't alwas catch every move thats for sure but from my opinion the point of trading is to find value, not to catch every move but to the catch the very best moves , that's my slant on the number lines and ACD but like the other members have suggested theirs really no right or wrong way and we all can diverging views on acd and numberlines aslong as it works. Mav where you at ?

 

[Robert Yanks]

Come on now boys we can’t let the best, most informative thread on ET fade away. Mav lives on!

I’ll start.

I’m a chart guy (I know, it doesn't work). I watch a ton of stocks and ETF’s for the obvious patterns and draw the obvious trend lines (and revise them on the far right side). And, then I gasp …. fade when everything lines up with the “Obvious” and “Not so obvious”.

A number of the Dow 30 have pulled back to Qtr A Downs, and it’s been said that when that happens they will often times bounce back to the Qtr A Up. In addition, many of the charts have nice obvious chart correlations. Let’s look at a few and then you post something that’s got your ACD feelers out.

3M Company (MMM):

Obvious: Sweetly stopped right on top of a rising 200 day EMA and old support line from 12/15/14. Clearly range bound for months. I like a very low Stoch and there it is.

Not so obvious: Qtr A Down at 156.66 and Qtr A Up at the 170 and 3/4th area.

Proctor and Gamble (PG):

Obvious: A ¾ completed “Spring Reversal Pattern”. A 10 touch resistance trend line waiting in the 83.25 area (along with the down sloping 50 DMA) and a nice low Stoch reading.

Not so obvious: Friday’s wick just pierced the Monthly A Down at 79.13 and the Monthly A Up is resting just above the 200 DMA at 85.54.

One more?

The Travelers (TRV):

Obvious: Range bound and soooo nicely sitting on a rising simple 200 DMA with a mini double bottom. A 5 touch descending resistance trend line waiting in the 107 and ½ area. Nice chin in the floor Stoch too.

Not so Obvious: Confirmed the Qtr A Down at 103.96 but hasn’t done much except wait around to chew the fat and bum a smoke. Monthly A Up volatility level is 104 with Qtr A Up resting in the breeze at 111 and ½.

Let’s see what they do.

 

[ignl]

Come on now boys we can’t let the best, most informative thread on ET fade away. Mav lives on!

I’ll start.

I’m a chart guy (I know, it doesn't work). I watch a ton of stocks and ETF’s for the obvious patterns and draw the obvious trend lines (and revise them on the far right side). And, then I gasp …. fade when everything lines up with the “Obvious” and “Not so obvious”.

A number of the Dow 30 have pulled back to Qtr A Downs, and it’s been said that when that happens they will often times bounce back to the Qtr A Up. In addition, many of the charts have nice obvious chart correlations. Let’s look at a few and then you post something that’s got your ACD feelers out.

3M Company (MMM):

Obvious: Sweetly stopped right on top of a rising 200 day EMA and old support line from 12/15/14. Clearly range bound for months. I like a very low Stoch and there it is.

Not so obvious: Qtr A Down at 156.66 and Qtr A Up at the 170 and 3/4th area.

Proctor and Gamble (PG):

Obvious: A ¾ completed “Spring Reversal Pattern”. A 10 touch resistance trend line waiting in the 83.25 area (along with the down sloping 50 DMA) and a nice low Stoch reading.

Not so obvious: Friday’s wick just pierced the Monthly A Down at 79.13 and the Monthly A Up is resting just above the 200 DMA at 85.54.

One more?

The Travelers (TRV):

Obvious: Range bound and soooo nicely sitting on a rising simple 200 DMA with a mini double bottom. A 5 touch descending resistance trend line waiting in the 107 and ½ area. Nice chin in the floor Stoch too.

Not so Obvious: Confirmed the Qtr A Down at 103.96 but hasn’t done much except wait around to chew the fat and bum a smoke. Monthly A Up volatility level is 104 with Qtr A Up resting in the breeze at 111 and ½.

Let’s see what they do.

I have only PG data (attached). It kinda have confirmed negative NLs and jumped into downtrend column so I would be cautious bull, but of course I do not really follow it and don't know whole context, news, fundamentals etc...

 

[SteveM]

Hi everyone,

Couple of questions for those who have traded ACD intraday within the futures market:

1) Is a good rule of thumb to stay on the sidelines during days with wide opening ranges?

2) Is a good rule of thumb to stay on the sidelines during days where the opening range is significantly higher/lower than the prior day's close due to a big move during the overnight session?

3) Do you think paying attention to the pivot range has merit? Do you prefer the one-day or three-day pivot? Do you calculate the pivot range using the 24-hour market, or just the daily session?

Would be very grateful if anyone could answer these questions.

 

[DT3]

I trade equties but since no one has responded I'll give you my perspective it may be helpful if your trading the emini.

1. Yes, or you can look to fade the moves.

2. Are you describing a gap move? Futures trade round the clock for the most part. What are you using for your opening and closing times.

3. I haven't found them to hold any statistical significance (referring to daily)

 

[Robert Yanks]

I have only PG data (attached). It kinda have confirmed negative NLs and jumped into downtrend column so I would be cautious bull, but of course I do not really follow it and don't know whole context, news, fundamentals etc...
View attachment 152335

Hello Ignl,

You're right of course. It's fairly negative and we'll see how it does around the ole Qtr A Down.

What can you tell us about your trading style Ignl, and how you incorporate ACD levels? How, if at all, are you using number lines? I'd be very interested.

Thanks

 

[ignl]

I basically use only ACD and a lot of stuff from this thread, so better learn from original man - Maverick (btw I saw his 20001 post in some thread a while ago). I also coded reversal indicators from Fisher's book and found that they very often signal reversal but needs some other confirmation (have this signal on FXI now (china) and knowing that it is a big bubble and fundamentals are not that good over there and almost 50% of that etf is chinese financials it could be a good fundamental confirmation so maybe its a good moment to try timing this bubble). I use automated NLs which are nice but not that terribly effective alone. For levels, I like to have some "story" or theory and then, I might fade weekly or monthly if it fits my theory, but if A later confirms then my idea is probably wrong. If A is confirmed I usually wait for pullback to that A level but that sometimes misses good trades. Also I have coded my application which shows prices in columns like Livermore described in his book. It is useful to quickly see where the price is - bullish trend, bearish trend, natural reaction, natural rally etc. That helps when watching a lot of products, but I will probably need to scale down on that - too much is not good either as you loose focus... My master plan is machine learning trading so currently working on that

 

[ignl]

Hi everyone,

Couple of questions for those who have traded ACD intraday within the futures market:

1) Is a good rule of thumb to stay on the sidelines during days with wide opening ranges?

2) Is a good rule of thumb to stay on the sidelines during days where the opening range is significantly higher/lower than the prior day's close due to a big move during the overnight session?

3) Do you think paying attention to the pivot range has merit? Do you prefer the one-day or three-day pivot? Do you calculate the pivot range using the 24-hour market, or just the daily session?

Would be very grateful if anyone could answer these questions.

1. and 2. questions I think you have to find answers yourself and what fits you. Then you will know why you are staying sidelines or are doing what you are doing.

 

[Trader13]

Well, if everyone keeps talking about him he might be tempted to come back...

I don't know what Mav's current status is, maybe he just moved on after an impressive 20K posts. There have been a handful of members like Mav who have added great value to this forum over the years. I wonder if they leave, at least in part, because they are not properly recognized for sharing their expertise.