I find that the 3-day rolling pivot really does hold up better than the one day one with FX on an intraday time frame. That was what Fisher used in the recent CQG video too.
The ACD Method
- Thread starter sbrowne126
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In my opinion, you are correct in the sense that mindlessly buying every A up/down based off an intraday opening range is not likely to be a great strategy....there are times when you definitely can mindlessly do it everyday and finish the month profitable.....the 2x VIX etfs when the market starts tanking, trading the 3x gold miner etfs when gold is rocking, crude during really volatile periods, etc.
There is a ton of value in getting under the hood of ACD and seeing how it can help you structure profitable intraday trades. For example:
-Is it more profitable to buy/sell intraday A signals and hold until the market closes, or hold until I make 1/2/3/4/5x my initial risk?
-Are A signals more reliable if I let the market confirm, then pull back into the opening range and breakout of the OR again? If I take this 2nd entry, do I need to risk all the way to the bottom of the OR or can I risk to half the OR?
-If the market gaps up in the morning and then makes an A-down on the 3rd 5M bar of the day, is it better to take or fade that A down signal?
-If the market opens with 3 wide-range directionless 5M bars that overlap one another, and then makes an A-up, is that signal less reliable than if the market had 3 green closes to start the day?
-If the market gaps down, starts the day with 2 red 5M bars, and then bounces off the A-down level with a huge green reversal bar, what usually happens after that reversal bar? Can I make 1x my risk off that reversal bar? 2x?
-If my A-up level happens to be slightly below my 3-day rolling pivot range, is it more dangerous to take that A-up signal? Is there anything I need to watch out for?
-Is it more profitable to fade C signals in stocks?
Opening up a spreadsheet and finding the answers to these questions could be helpful. Best of luck to you.
If you read the book you'll also see how so many people use it in different ways at the end. I also skimmed that section originally but there are some interesting insights there for the more intraday oriented traders.
One guy used a 1 minute OR based on the second month futures (while trading the underlying) but with higher A values. Another one used breakout of the OR to establish a bias then went in after retracements unless it really got to the other side of the OR. For FX intraday I think a lot of these are still useable.
I'm still a noob myself so I don't want to say too much but I think the trades (intraday scalping) I do according to ACD are generally quite high probability. Another thing is that it just keeps me out of the market if there is nothing much going on. When I go against it is usually when I lose money.
One guy used a 1 minute OR based on the second month futures (while trading the underlying) but with higher A values. Another one used breakout of the OR to establish a bias then went in after retracements unless it really got to the other side of the OR. For FX intraday I think a lot of these are still useable.
I'm still a noob myself so I don't want to say too much but I think the trades (intraday scalping) I do according to ACD are generally quite high probability. Another thing is that it just keeps me out of the market if there is nothing much going on. When I go against it is usually when I lose money.
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Once upon a time I got hung up on the word "edge". I've backtested a wide variety Number Lines. The predictive power is 50% accuracy. Telling you that it is a coin flip might sound like "game over" and "no edge!". I don't believe that. ACD has the uncanny ability to put you "in the right market" based on the Number Lines. The way the ACD Method captures the current Volatility theme of a product is amazing.
Rather than looking at the predictive power, look at your PnL if you would have traded Pure ACD in a Systematic Non-Discretionary way over a 20 Trading Day Period. Look at it through a fresh set of eyes and you will understand what I mean. You might have 5 losers in a row and then one big trade. Like Fisher said, you will get hit with the jab but you will never get hit with the knock-out punch.
The other great thing about the Number Lines is it helps you decide which product you should focus your attention on. Think of all of the ways people decide what they should watch on a particular day. They might be swayed by news headlines, CNBC hype, chat rooms or even random people on message boards.
How would you like to have a systematic and consistent way to select a market/product to trade? Number Lines provide that and that alone is a powerful thing.
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Following on from what Mav alluded to earlier, I have been looking at NL derivatives.
I take the derivative of the NL itself as well as the derivative of the daily scores based on As and Cs, with respect to the day. I just use Excel.
It's quite interesting, for example, for the AUDUSD, it gives me a -3 on the A-Deriv for 13th Dec on my monthly NL, which was when it began the decline from the FOMC meeting until the end of December. Of course, to get the -3 value, you still have to wait for the 14th itself, not really top-picking per se.
The NL-Deriv reset to 0 on the 27th which also marked the end of the decline then began turning positive.
Still need more work and more data to see how it works of course.
I take the derivative of the NL itself as well as the derivative of the daily scores based on As and Cs, with respect to the day. I just use Excel.
It's quite interesting, for example, for the AUDUSD, it gives me a -3 on the A-Deriv for 13th Dec on my monthly NL, which was when it began the decline from the FOMC meeting until the end of December. Of course, to get the -3 value, you still have to wait for the 14th itself, not really top-picking per se.
The NL-Deriv reset to 0 on the 27th which also marked the end of the decline then began turning positive.
Still need more work and more data to see how it works of course.
Just to add to my post above -- so my NL-Deriv essentially is a contexualized A/C score given the next day's results. On the day itself I might give it a score of 2, but with the knowledge of the next day, my 2 might really be worth a 0 or a -1 might be worth a -2.5.
The A-Derivative is the rate of change of A per day -- how fast it's going up or down.
AUDUSD was the most noteworthy thing in my December NLs I noticed. USDCHF also somewhat, towards the end of December.
For GBPUSD I actually had a pretty negative NL by the mid-December but the NL derivatives were still quite moderate and it started to turn around by the final few days.
I score it as per the book, at least as far as I understand.
The A-Derivative is the rate of change of A per day -- how fast it's going up or down.
AUDUSD was the most noteworthy thing in my December NLs I noticed. USDCHF also somewhat, towards the end of December.
For GBPUSD I actually had a pretty negative NL by the mid-December but the NL derivatives were still quite moderate and it started to turn around by the final few days.
I score it as per the book, at least as far as I understand.
BTW does anyone know how Fisher comes up with the monthly change in trend days or if it's still valid?
It reminds me a lot of Martin Armstrong's "trend-change" phases in his model. Actually a lot of things in ACD are reminiscent of that, except that Armstrong often is rather incoherent and vague. But for example Armstrong has his bullish or bearish reversals, which if elected would signal a change in direction, similar to A levels in ACD.
Maybe it's a consequence of both systems being developed in 1980s New York.
It reminds me a lot of Martin Armstrong's "trend-change" phases in his model. Actually a lot of things in ACD are reminiscent of that, except that Armstrong often is rather incoherent and vague. But for example Armstrong has his bullish or bearish reversals, which if elected would signal a change in direction, similar to A levels in ACD.
Maybe it's a consequence of both systems being developed in 1980s New York.
If I remember correctly from Fisher's ACD seminar videos, he said the change in trend model for stocks was based off seasonal tendencies. Last time I checked his website, he is no longer providing that info.
I built an excel model a few years ago that pulled historical price data and conducted similar analysis. There was some value in it; usually you'd find stocks that perform really well during a certain couple weeks of the year, and then you'd dig deeper and learn that Q3 earnings results were consistently good every year for the 5 years prior.
There are Excel models freely available online that will pull the historical price data automatically for you; with some tinkering you can setup a similar seasonal model fairly easily.
Yuuuuuge move on USDCAD... which I didn't catch.
It had already confirmed the A-Down from both the London OR and NY OR (I started using multiple ORs after I saw someone's notes here on Fisher's video with MrTopStep saying he used multiple ORs.
My USDCAD NL and derivatives were also very negative.
After the first move, Saxobank's newsfeed apparently was claiming it was due to Trump, but I googled and didn't see anything recent so I thought WTF did the news guy mean. I didn't want to enter at that point.
My custom pivot-range indicator includes the lines used for the pivot calculation, including the High Low and Close. So the USDCAD actually consolidated a while then broke the previous low and shot right down for 70+ pips.
I guess it was a perfect example of "if no one knows why a big move is happening, it's going to continue" + NLs pointing towards a big move.
It had already confirmed the A-Down from both the London OR and NY OR (I started using multiple ORs after I saw someone's notes here on Fisher's video with MrTopStep saying he used multiple ORs.
My USDCAD NL and derivatives were also very negative.
After the first move, Saxobank's newsfeed apparently was claiming it was due to Trump, but I googled and didn't see anything recent so I thought WTF did the news guy mean. I didn't want to enter at that point.
My custom pivot-range indicator includes the lines used for the pivot calculation, including the High Low and Close. So the USDCAD actually consolidated a while then broke the previous low and shot right down for 70+ pips.
I guess it was a perfect example of "if no one knows why a big move is happening, it's going to continue" + NLs pointing towards a big move.