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ACD trading By Mark Fisher
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ACD trading By Mark Fisher

  #481 (permalink)
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Autot View Post
@Fat Tails

Here comes the exceptional cases.
I would love to improve my method to avoid these from happening but obviously there are always inevitable losses for any trading setup.
I share those to see if you guys have encountered these before and maybe you guys would have thought of a solution already.

Fig.1
- This shows how I would have taken the gain way earlier than the real up move, which comes after a little drop in price close to the Noise Band_Up (but not touching it)
- Maybe the pivot point system can be applied when it breaks through R2, open a "Long" position etc etc
- In hindsight, it looks like it is very logical to long right above the Noise Band_Up when it falls back to it but not touches it. However, when you are actually trading at that moment, it was a place to trade because the next bar could have fallen right through the noise band and serious loss would be taken.

Fig.2
- This shows 1 successful short trade early in the morning
- It is the only day that a very narrow noise band has generated profit
- A large part of the down move is missed out but as I said above, opening a short position at the bottom of the Opening Range is a dangerous move
- The rubber band trade that Mark Fisher mentioned in his book, in my opinion, is not really worth it. Maybe it is my lack of ability to confirm a false breakout but I find that trading that way would suffer in a long period of time.
There are many cases where you profit from a few rubber band trades (e.g. short on top of opening range / pivot range...) but then loses it all in one real breakout.

Fig.3
- shows how a large part of down movement is missed out due to the way I stop gain

Fig.4
- shows a case when the Noise Band is inside the opening range
- a lot of failed breakout, resulting in a few stop losses trades

Fig.5
- This is the worst scenario for stop losses
- Once I longed, normally I should be able to stop loss at the bottom of Noise Band_Up.
This is, I believe, one of the key reason why the noise band is so effective and useful because it is a price level that you know as soon as the market opens. And you know that in most cases (over 80% from my observation for the data I have in hand) that the specific move (could last for 1min - 60min+) that you have traded does not end at the noise band.
In other words, you know for sure that if you long at this point, there is almost always profit coming. it solved one of the 2 key questions in trading (when to enter and when to exit).
- The day shown in this figure has 3 enforced stop losses. By this, I mean when I would not be able to stop losses at the bottom of the Noise Band. The rule I set for this is that if the next 5min-candlestick opens below the noise band, I will close my position immediately and take the hit.
I would have had to do this 3 times on this day (#1, #2 and #4 of the trades), 12.5pt losses


Any comment is welcomed.

It is really an art to setting trading rules, conditions and setup because the more you have, the less "executable" trades you would see in the market yet it does not mean the fewer trades you do will be more profitable.

I do not know how your market behaves. You are trading against other traders, your strategy needs to adjust to their behaviour. Also it is important to have an idea in the morning of the trading day, whether price action is likely to be rangebound or whether a trending move can be expected.

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  #482 (permalink)
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Fat Tails View Post
I do not know how your market behaves. You are trading against other traders, your strategy needs to adjust to their behaviour. Also it is important to have an idea in the morning of the trading day, whether price action is likely to be rangebound or whether a trending move can be expected.

Thanks.

Sure. There are things that are specific to the market here, including things like a political bottom of SH index (2000 pts), that I did not mention in the previous posts.
I personally look at the relative position of 3d pivot range and opening range plus market news to have a preliminary judgement on the direction of the day.

Using the noise band method and entry, exit points I mentioned above, I am recording a profit of 236pts and a loss of 124pts in the last 41 trading days. A net profit of 112pts (~33%) in the last 41 trading days. (around 2 months as markets are closed on weekends and public holidays)
Obviously this was a just a manual backtest but taking a discount on that number for poor execution, it is still a method worth studying for me.

I wanted to focus on the technical side of this noise band method.

For example,
1. have you encountered any of the cases above and what is your view on these days? e.g. noise band being in the opening range / noise band overlapping with the 3d pivot range...
2. how do you determine when to cash in your gain when it is above / below the noise band

Rubber band trade, or whatever you call it, is something else I would look into after I am done polishing my current setup.

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  #483 (permalink)
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mfbreakout View Post
Point being, if i have to do it again, I will first read a book which helps with EXECUTION ( for me it is MF book) and then read all the other wonderful books.

I started with Market Wizard and about 100 other wonderful books but all of them had little to show in terms of EXECUTION. At first stage of my development I needed a book from a master trader like Mark Fisher.

Like mfbreakout I've spent thousands on books (lost count - must be over three hundred or so, most have been given away and only a few have been kept) and market profile was one of my first approaches that I later abandoned again in favour of something I developped myself. While browsing the logical trader book online I came across something worthwhile and that made me want to read the book from cover to cover and I've ordered it. I'll go from there and see where it leads to and will be following this thread.

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  #484 (permalink)
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ACD method


daVinci View Post
Like mfbreakout I've spent thousands on books (lost count - must be over three hundred or so, most have been given away and only a few have been kept) and market profile was one of my first approaches that I later abandoned again in favour of something I developped myself. While browsing the logical trader book online I came across something worthwhile and that made me want to read the book from cover to cover and I've ordered it. I'll go from there and see where it leads to and will be following this thread.


You can read latest 2 months of post of my journal which I recently closed to get some practical applictaions of ACD

in terms of execution.

https://futures.io/elite-trading-journals/17308-trading-futures-context.html#post402644

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  #485 (permalink)
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@mfbreakout

Thanks for your invite to your journal - I'm new here and at this moment I am not (yet) an elite member so have no access.

( Just feeling my way around at this moment and then I'll decide if I want to become an elite member or not. )

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  #486 (permalink)
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Does anyone know if Fisher lists all of his "A" values in ticks on his subscription service or are some of the values in points?

For instance, the ES is listed at 3.5 and the CL at 8. I know CL is 8 ticks, because 8 points for the CL is unrealistic, that would be 80 ticks, but he lists NG as 50, that is obviously 50 ticks. I'm assuming the ES is 3.5 points and not ticks?

The TF is listed at 2. Would this be 2 ticks or 2 points...there is a big difference between 2 ticks and 20.

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  #487 (permalink)
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I had a trial subscription for a bit. I don't think the ACD values have not changed in a long time. I always wondered if NG was really 50 ticks, it seems a lot compared to CL. The book used an example of 15 ticks for NG. TF is 2.00pts. CL was still 8 ticks.

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  #488 (permalink)
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I use 8 for the A value and the C value on NG with an open range of 5 mins. The latest revision on the values is still 2/7/2014. We still use some of the original values back in 2012.

Also you can just do a little back testing with different values to see what is working best.

I have started a Top Step Trader Combine last week using the ACD method and I have 100% winning average so far trading crude and soybeans.

Also kudos to Fat Tails for is OR indicators....I love it.

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  #489 (permalink)
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A & C value NT Indicator

Fat Tails wrote me an indicator to plot the A & C levels for any instrument. The inputs for the A & C levels are in ticks, and you determine what OR you want to use. I am posting it here for anyone who wants to use it. The picture attached are my settings for the CL in central time zone.

Attached Thumbnails
ACD trading By Mark Fisher-acd-cl-settings.jpg  
Attached Files
Register to download File Type: zip OpeningRangeACV42.zip (12.9 KB, 156 views)

Last edited by silver99; September 8th, 2014 at 11:43 AM. Reason: Settings pic added
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  #490 (permalink)
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indicator



silver99 View Post
Fat Tails wrote me an indicator to plot the A & C levels for any instrument. The inputs for the A & C levels are in ticks, and you determine what OR you want to use. I am posting it here for anyone who wants to use it. The picture attached are my settings for the CL in central time zone.

Silver just want to tell you thanks for posting this indicator and Fat Tails for writing it. We have a great room and all of the helping makes it even better.

Thanks
Hector

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