The ACD Method

[punisher]

Read what Mav said, which I very kindly reproduced for you.

Then think about it. Think about CBs, Mon Pol, Economic data, geo-politics.

Read the 2 books Mav suggested for FX, I did.

Then read Steidlmayer on Market Profile and understand auction market theory.

When that's done and dusted, let's talk.

My A up is a 1.

A 2 sided market I score as a 2.

A confirmed A and a confirmed reversal I score as a 3.

I use a 30 minute OR.

Confirmation was 3 hours, I found 2 hours works fine.

Friday is a shorter FX day, I use 90 minutes.

If we need to talk again, it will be next week, I have better things to do now.

Well, I'm not sure whether you trying to be a smartass or this is the way you just respond on Friday afternoons, tired of trading . I take it's the latter. With that being said let me be absolutely frank with you, as you are acting like you already have keys to the kingdom:

1. I have no interest in your own levels to copy. In fact I've never asked you about your Fx ACD. Have you noticed I asked about Dax?

2. The reason I asked you about Dax, is because upon reading this great thread, I found your struggles with Dax and was amazed with the simple (calling it gently) errors you were making. I was curious if you figured it out or what lead you to abandon it.

3. News flash to you: Market Profile is sort of obsolete. I have been closely following Volume Profiling (so yes, I know MP and market auction theory) for two years and that's a great tool for central exchange traded stuff especially ES.

4. I don't see VP applications (or MP) for FX though. If that works for you, great!

5. As far as the books, thanks for recommendations, but like Fish said during seminars (similar stuff was in Market Wizards) about those institutional "traders", you know they are mostly just "dealers" right? Once they leave institutional world they can barely trade on their own, you know that right?

6. As far as reading (and replicating...if that's what you are suggesting) Mav's stuff, I did read it and I will follow on that with my next post.

 

[punisher]

Currencies work absolutely BEST with this technique due to their mean reversion nature.

While ES, like many indices is mean reverting intraday. Currencies are not (neither intraday nor longer term), at least not on the charts I'm looking at...

I'm glad that you found something that works for you. I've seen the stuff Maverick wrote about but... well, allow me to explain in full so things don't get out of the context.

Maverick (with others help) is doing a fantastic job of keeping this thread alive (thank you!), spreading the word about ACD, helping others in many ways. No doubt about it, can't deny it. But I would be careful reading into this fantastic thread and treating it like an oracle. There are some things in this long&old thread (I'm not going to elaborate on) that sound just like random ramblings and things that I disagree with (based on other materials I've seen before).

It is important to remember that in trading there are many ways to skin the cat, including many ways to apply ACD method. It's been said many times in this thread that ACD is just an approach that needs to be used with whatever else you are using or want to use. Reading this thread it looks like everyone wants to or should trade ACD like Maverick... that is my (personal) problem reading this otherwise fantastic thread, because it makes me feel like I should too and I know my body&soul is rejecting it. This thread also (kind of) sounds to me like Mav's ACD approach is the way Fisher is advocating for... Well, I need to re-read the book and re-watch the seminars, but from what I remember or from what I understood, this is not what the Fisher was trying to convey. IMO he was just trying to show many different ways to incorporate ACD to other stuff, whether you are trading short term or long term. In fact he always underscored the importance of KISS and having a system that is "moron-prof". Not only that, if the ACD was meant to be used the way Maverick trades, how would you have Fish's traders scalping markets!?

I'm fully aware that there is nothing wrong with this thread per se, it is with me. I'm just trying to say that before this thread, upon reading/watching Fish's stuff my mind was happy and open to work on my own stuff, not copy someone else's work. What I feel is missing in this thread and should have been said more often is that the first part of Fish's book (regarding OR, A/C, stops and maybe general idea regarding Pivot Ranges) is what is the most important in the ACD and the rest of the stuff really needs to come from the trader, his/her own ideas, views on the market, tools etc.

I hope what I said will not get out of the context. It's a great thread with many many great ideas from Maverick but it is important to keep in mind that trading is not about copying someone else. That's why I intend to bury myself in my cave and work on my own ACD method and see where it leads me. I know for sure it is not going to be anywhere remotely close to Maverick's way of using it and I know this is the right way to pursue that project.

 

[Maverick74]

While ES, like many indices is mean reverting intraday. Currencies are not (neither intraday nor longer term), at least not on the charts I'm looking at...

I'm glad that you found something that works for you. I've seen the stuff Maverick wrote about but... well, allow me to explain in full so things don't get out of the context.

Maverick (with others help) is doing a fantastic job of keeping this thread alive (thank you!), spreading the word about ACD, helping others in many ways. No doubt about it, can't deny it. But I would be careful reading into this fantastic thread and treating it like an oracle. There are some things in this long&old thread (I'm not going to elaborate on) that sound just like random ramblings and things that I disagree with (based on other materials I've seen before).

It is important to remember that in trading there are many ways to skin the cat, including many ways to apply ACD method. It's been said many times in this thread that ACD is just an approach that needs to be used with whatever else you are using or want to use. Reading this thread it looks like everyone wants to or should trade ACD like Maverick... that is my (personal) problem reading this otherwise fantastic thread, because it makes me feel like I should too and I know my body&soul is rejecting it. This thread also (kind of) sounds to me like Mav's ACD approach is the way Fisher is advocating for... Well, I need to re-read the book and re-watch the seminars, but from what I remember or from what I understood, this is not what the Fisher was trying to convey. IMO he was just trying to show many different ways to incorporate ACD to other stuff, whether you are trading short term or long term. In fact he always underscored the importance of KISS and having a system that is "moron-prof". Not only that, if the ACD was meant to be used the way Maverick trades, how would you have Fish's traders scalping markets!?

I'm fully aware that there is nothing wrong with this thread per se, it is with me. I'm just trying to say that before this thread, upon reading/watching Fish's stuff my mind was happy and open to work on my own stuff, not copy someone else's work. What I feel is missing in this thread and should have been said more often is that the first part of Fish's book (regarding OR, A/C, stops and maybe general idea regarding Pivot Ranges) is what is the most important in the ACD and the rest of the stuff really needs to come from the trader, his/her own ideas, views on the market, tools etc.

I hope what I said will not get out of the context. It's a great thread with many many great ideas from Maverick but it is important to keep in mind that trading is not about copying someone else. That's why I intend to bury myself in my cave and work on my own ACD method and see where it leads me. I know for sure it is not going to be anywhere remotely close to Maverick's way of using it and I know this is the right way to pursue that project.

Nobody on this thread trades the way I do, I can almost gurantee you that. I have no idea where you got that from. In fact, I don' even think anyone trades the same markets that I do. I think you need to read more of this thread. Nobody is following me. Everyone here is doing their own thing. Think of this thread like a grocery store. Go up and down the aisles and take whatever you want off the shelves and leave what you don't want.

 

[punisher]

Nobody on this thread trades the way I do, I can almost gurantee you that. I have no idea where you got that from. In fact, I don' even think anyone trades the same markets that I do. I think you need to read more of this thread. Nobody is following me. Everyone here is doing their own thing. Think of this thread like a grocery store. Go up and down the aisles and take whatever you want off the shelves and leave what you don't want.

It is not about what markets you trade or how you trade, how can I know what/how you trade (besides what you obviously described in this thread over the years), how can you know what/how others trade? You didn't get my point, but that's fine. Besides I said clearly that it was my subjective impression and I could be wrong about how I feel. I read hundreds of pages of this fine thread and if you claim that nobody is trying to follow what you do then we must be reading different threads or you need to read it again. Or, as I said, it was my wrong impression.

But as I said earlier, I really appreciate your contribution and there is plenty of outstanding info here. There is not much to argue about. You did a tremendous job, I just wanted to remind others that ACD can be used in many various ways and not to try to use it how you use it but look for your own application. In fact I would even suggest i.e. to reconsider using fixed A/C levels. Fixed levels are fine to make the system moron-proof, which is important since once in the trade trader suddenly gets "smarter" than right before it. But other than psychological effect, fixed levels might not be the best idea since it is the current market conditions that dictates the levels. And I will leave at that.

Did I mention this is a great thread?

 

[justrading]

https://www.forbes.com/sites/bretts...akes-to-successfully-trade-financial-markets/

 

[SteveM]

Grains ripping higher

 

[Maverick74]

Jeffrey Gundlach will be on the Halftime Report today on CNBC. Should be interesting to hear his thoughts on rates and commodities.

 

[JM1]

New guy here. I've been reading this thread here and there for a few months to try to properly understand ACD. Thanks to everyone who has contributed over the years because you have been extremely helpful.

Maverick, I know you've answered ACD questions for at least a decade now, some questions multiple times. I hate to ask you anything since it's probably already been answered, but I want to make sure I haven't already glossed over those answers.

You've said in the past that simply trading ACD as laid out in the book will get you killed. I'm trying to understand why. Is it because ACD is not a mechanical system but a lens through which to view the market? For example, a confirmed A Up gives you a bias rather than a long position because you still need to read and interpret the price action and utilize the other information the ACD tools give you. So you might not get long after an A Up because you want to see how price reacts to the pivot range that's just above it or because of a very wide OR, etc.

 

[Maverick74]

New guy here. I've been reading this thread here and there for a few months to try to properly understand ACD. Thanks to everyone who has contributed over the years because you have been extremely helpful.

Maverick, I know you've answered ACD questions for at least a decade now, some questions multiple times. I hate to ask you anything since it's probably already been answered, but I want to make sure I haven't already glossed over those answers.

You've said in the past that simply trading ACD as laid out in the book will get you killed. I'm trying to understand why. Is it because ACD is not a mechanical system but a lens through which to view the market? For example, a confirmed A Up gives you a bias rather than a long position because you still need to read and interpret the price action and utilize the other information the ACD tools give you. So you might not get long after an A Up because you want to see how price reacts to the pivot range that's just above it or because of a very wide OR, etc.

A couple of reasons. One, ACD is meant to help traders make informed decisions. This includes filtering asset classes, looking for relative value, and spotting rare opportunities. You still have to trade the product well, but ACD will improve upon that process. Another issue is momentum. When Fisher traded ACD as it was laid out in the book, he was doing this in the 1990's and in the trading pits. Those were way before the algos showed. Why am I blaming algos? Algos are prolific faders. They fade everything that moves. That headwind kills momentum. How often do you hear about commodities making limit moves these days? Do you know even what that is? Back in the 1980's and 1990's markets were going limit often. Not everyday for sure, but several times a year were not unreasonable. It's just different today.

Where ACD really shines is on the first time items I listed. Most traders lack focus, patience and instead of looking for rare opportunities, they go after the obvious, the crowded, the greasy wheel. The irony here is, I don't even think Fisher thought about these things when he first created it no more then Mark Zuckerberg thought about the 2nd and 3rd order effects Facebook would have 10 years down the road. Often things are invented or created that serve a purpose at the beginning but over time morph into something entirely different and usually far more effective. Minoxidil was invented to be used to treat high blood pressure. One of the side effects was that it helped re-grow hair for bald men. Today the product is only being used for that purpose. It didn't take me long when I first read Fisher's book to see how his methodology could be transformed into something better. Perhaps if Fisher came into the business 15 or 20 years later than he did he would have figured out exactly what I did.

 

[JM1]

Thank you, Maverick . I'm in my mid-twenties, so the markets of the past 6 or 7 years are all I've known. Limit moves are something I occasionally hear about but have never witnessed.

You still have to trade the product well

You've said this a few times in the past, but I'm not certain what you mean by it. When you say trade well, do you mean things such as: keeping your emotions in check or trying to minimize their effect on your trading, determining when you're wrong and cutting losses short, managing risk, giving winning trades some wiggle room to work themselves out and letting them run, trading with an edge, not over-trading, etc.?

Why am I blaming algos? Algos are prolific faders. They fade everything that moves. That headwind kills momentum... It's just different today.

Because of this, are A and C moves rarer and/or less profitable now? Likewise, are failed A's and C's now more common and/or more profitable? Or is momentum a resource that we have to look harder for now and should appreciate more?

It didn't take me long when I first read Fisher's book to see how his methodology could be transformed into something better. Perhaps if Fisher came into the business 15 or 20 years later than he did he would have figured out exactly what I did.

Admittedly, I still haven't finished the book. I was introduced to ACD through the 6-part video on YouTube. After that, I started reading forum threads, this one in particular, to learn more about it and see what has changed. I've been through a few phases with ACD. First, I simply wanted to apply the method without understanding why and how it works. Then I started trying to figure out what made it tick and thought it was an OR breakout system. Now I think and hope I'm catching on to what you've been saying: that ACD is about volatility, time, and price action. If I have that mindset, I'd get the most out of the book now, right?