The ACD Method

Would love to get everyone's opinion on NL values. I've been tracking the ES values for awhile now and doing it with the method mentioned in the book. (15min OR). I'm noticing there are rare times like last Thursday where well get a -4 day but the market really isn't as bearish as that value would lead you to believe. On that day market sold off since it was worried NK would do a nuke test over the weekend and what the US reaction would be. Obviously it didn't happen. On a binary event like this that turns out to be a non event does anyone go back and edit that NL value to a -2 or even a 0 since the reasons for the -4 value turned out to be false and can skew your number lines to be more bearish than they really should be?

I found myself missing some nice upside trades this week since my shorter term NL derivatives were pointing only to the short direction when I should of been taking both sides.

Thanks for any guidance.
 
TradeLogic said:
Would love to get everyone's opinion on NL values. I've been tracking the ES values for awhile now and doing it with the method mentioned in the book. (15min OR). I'm noticing there are rare times like last Thursday where well get a -4 day but the market really isn't as bearish as that value would lead you to believe. On that day market sold off since it was worried NK would do a nuke test over the weekend and what the US reaction would be. Obviously it didn't happen. On a binary event like this that turns out to be a non event does anyone go back and edit that NL value to a -2 or even a 0 since the reasons for the -4 value turned out to be false and can skew your number lines to be more bearish than they really should be?

I found myself missing some nice upside trades this week since my shorter term NL derivatives were pointing only to the short direction when I should of been taking both sides.

Thanks for any guidance.
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I don't go back and change NL scores, but I am cognizant of geo-political stuff and do take it into account when deciding whether to take a trade.

I haven't traded the US Indices in a while, but still maintain my number lines anyway. My 5D and 30D both confirmed negative on Monday, the 5D having reset for a day on the 12th. There was a failed A up on Tuesday, and both NLs remained solidly negative through Tuesday so if you were looking for a short yesterday, the failed A up was it. I don't trade this way so I'm just telling you what I see on the charts in relation to my number lines.

As I've said before, geo-political developments have a tendency to overwhelm ACD, so I'm resigned to not catching ever opportunity. There were some EUR trades this week but I resisted taking them because of the election; I like to trade a bit longer term than a couple of days or so. Been hard sitting on my hands though.
 
TradeLogic said:
Would love to get everyone's opinion on NL values. I've been tracking the ES values for awhile now and doing it with the method mentioned in the book. (15min OR). I'm noticing there are rare times like last Thursday where well get a -4 day but the market really isn't as bearish as that value would lead you to believe. On that day market sold off since it was worried NK would do a nuke test over the weekend and what the US reaction would be. Obviously it didn't happen. On a binary event like this that turns out to be a non event does anyone go back and edit that NL value to a -2 or even a 0 since the reasons for the -4 value turned out to be false and can skew your number lines to be more bearish than they really should be?

I found myself missing some nice upside trades this week since my shorter term NL derivatives were pointing only to the short direction when I should of been taking both sides.

Thanks for any guidance.
More...

The number lines actually do a great job of absorbing the news events and discounting them properly. No single one -4 or +4 day should really change anything. My number lines have transitioned from very strong post inauguration to choppy now. And sure enough, the market is choppy. I should add that -4 or +4 days are RARELY indicative of direction. In fact, I've mostly seen them to be counter to their score meaning a -4 day in a strong uptrend is a great buy signal and vice versa. Usually +4 and -4 days come in choppy ranges which makes intuitive sense. When you follow number lines for a long time you will get to know them very intimately. At first it takes some getting use to because you might be tempted to treat them like an indicator following standard TA which they are not.
 
Maverick74 said:
The number lines actually do a great job of absorbing the news events and discounting them properly. No single one -4 or +4 day should really change anything. My number lines have transitioned from very strong post inauguration to choppy now. And sure enough, the market is choppy. I should add that -4 or +4 days are RARELY indicative of direction. In fact, I've mostly seen them to be counter to their score meaning a -4 day in a strong uptrend is a great buy signal and vice versa. Usually +4 and -4 days come in choppy ranges which makes intuitive sense. When you follow number lines for a long time you will get to know them very intimately. At first it takes some getting use to because you might be tempted to treat them like an indicator following standard TA which they are not.
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Good point about the single number. I'm guessing he has looked at the charts and thought that because of the -4 he missed out on the ES upside moves Monday and today. With the NLs negative, his best bet would have been the failed A Ups Tuesday and Wednesday, but as you said the markets are choppy and it's half and half. I try my best to stay away from chop, kills me with my trading style.
 
I'm seeing continuing Dollar weakness and risk to the downside.

Other than the April 28th budget deadline/shutdown threat, is there anything else going on politically? Besides the never ending usual, that is.
 
justrading said:
I'm seeing continuing Dollar weakness and risk to the downside.

Other than the April 28th budget deadline/shutdown threat, is there anything else going on politically? Besides the never ending usual, that is.
More...

Over half of Europe has presidential elections in the next year. It's going to be busy in the FX world.
 
Thanks guys. Appreciate the input and all the insight you've provided in this thread. Right now I trade intraday on the ES and usually take a breakout and fade on the same day though depending on several factors one being a 5 day NL and another derivative of the NL that takes momentum into effect I may just take either a breakout or a fade. Todays breakout made 7.25pts and Fade lost 2.75. I can see when the 30 day NL is showing chop I need to give less weight to the 5day and momentum. The system so far ( 7 months) has proven fairly robust handling both choppy markets and trends partly due in thanks to the NL's.

One day I'll graduate to trading longer term with multiple markets but since this system is working sticking with it for now.
 
Maverick74 said:
Over half of Europe has presidential elections in the next year. It's going to be busy in the FX world.
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Relishing that. :D

Dollar has been sitting on the 200MA so I was wondering if I've missed anything. I usually don't catch the US political nuance you do from where I'm at, only the big stuff. Long before it came across my radar you had already warned that Trump might not have plain sailing with his own party, and so it has been.
 
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