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I have been looking at the 1st Print of the 1ST 5min candlestick for pit open of CL (evalauting the 9:05 candlestick-- EST in relation to price action) as far as pit open is concerned, in regards to this strategy:
Hello Has anyone every heard of or used the ACD method from Mark Fisher, Please send information about his technique. Thanks Incometrade
Mark Fisher uses a longer than 5-minute range to determine the volatility of the current day.
I personally do not use the volatility of the beginning session, but judge price action against the average daily volatility of the preceding 10 or 20 days. The noise or insignicificant price action is determined as the average of the insignificant moves from the open where
noise = insignifcant move = MIN ( High - Open, Open - Low)
that is the smaller of the distance from open to high and from open to low.
Below is a chart from yesterday's London session for EURUSD. The noise bands are based on the volatility of the prior 10 and 20 days. The average size of the failed moves from the open during the London session was 9.5 pips over 10 days and 13 pips over 20 days. I average those values to 11 pips and consider that any move of 11 pips from the open is not significant, but just caused by noise traders.
After a breakout from the noise bands, I enter long on a retracment back to the noise bands or the mid band, if the breakout is confirmed.
My targets are based on the average daily range of the London session. The target band is calculated by adding the average daily range of 64 pips to the current low or subtracting it from the current high. Yesterday's range of the London session was higher than the average 64 pips and attained 110 pips.
The chart from the New York session below shows a breakout to the downside, which in fact was just a retracement from the London move. For that reason it ultimatley failed and EURUSD broke out to the upsiide later during the day. The average daily session range of the New York session is 67 pips, which is only slightly higher than the 64 pips of the London session. Yesterday's range attained 96 pips during the New York session, still higher than average.
The indicator on the chart is a successor to the SessionNoiseBands and SessionVolatilityBands and will be shortly available.
@wireford: Sorry I have been writing too quickly. I was indeed referring to the midpoint between the two noise bands. The midband is the open of the current session, as the noise bands are symmetrical bands around the current open.