ACD: amg's Take on Mark Fisher's Method

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Opening Range, volatility breakouts, and pivots have become favorites to many day traders as they give a simple visual structure to price action. Mark Fisher has combined these methods in what he calls ACD, short hand for the volatility targets and opening range levels used in the meat and potatoes strategies he has developed over the past 20-30 years (he mentions he got in the business at 12 years old).

While I don't use his strategies, his ideas are interesting enough to me that I've incorporated his opening range ideas. His NYMEX symposium is simply dynamite and the first session a must for any trader. I've prepared a page summarizing the method and include a sample graph, along with templates suitable for Ensign users. Enjoy!

about the acd method

The ACD Method was developed by Mark Fisher, founder of MBF Clearing Corp, the largest clearing firm on the NYMEX. His book, The Logical Trader, delves more completely into the method and strategies.

This summary is intended only as an introduction and "quick start", based on materials available on the web. It is not intended to be all inclusive, it may differ from what Fisher currently uses, and nor do I claim to be an expert in the method. For further background, the following links are recommended reading:

MBF Corp Education Articles, written by Matt Blackman, include the key concepts and illustrations of just what an "ACD" looks like.

NYMEX 2003 Symposium, a series of six webcasts wherein Mark Fisher condenses his ideas, methods, and strategies, including a "real life" prep and trading session. Highly recommended for all traders is the first webcast. Links are no longer available! You gotta fork out $2500 to go to his symposium. heh.

main acd concepts

• The opening range (OR), typically anywhere from 10m to 60m, depending on the instrument being traded, forms the core of the method. The HL of the range are the "B" and "D" of the strategies.
   
• The OR is extended by a factor based on a percentage of the Average True Range of the past 3 to 30 days, again depending on your goals and the instrument traded. Fisher mentions A being 22% of the 30d ATR for the ES, in 2003. These extensions form the basis of the "A" and "C" in the strategies.
   
• The Daily Pivot is an integral part of the method and consists of the typical HLC/3 extended by the difference between it and the HL/2 Pivot, making a Pivot Zone.
   
• Fisher mentions the Market Profile method and at the time the book and symposium were current, maintained that his Pivot Range is comparable. My own study shows this is not necessarily true, but with the inclusion of Ensign's Price Histogram in the template, this issue becomes moot as you can use both.
   
• In the NYMEX symposium, Fisher describes various ACD strategies, which are beyond the scope of this article.

TEMPLATE DESCRIPTION

Chart of ACD parameters on ES: click here for image in a new window

The chart shown in the link above is created using several DYOS (Design Your Own Study) alerts. Feel free to change the presets (eg, colors, OR time from 15m to 10m or 60m, Price Histogram from Volume to Price, uncheck showing gap, etc). If you want to remove any item, unless you are experienced with DYOS, I suggest you "uncheck" the show box on the DYOS you'd rather hide.

The key preset features are

• 15m OR with A1, A2, and A3 range extensions of 3.5, 5.5, and 8, Larry Pesavento SPX harmonics.
   
• The user is encouraged to run ATR studies on past data and determine if they want to change the OR extension A1, A2, and A3 values. There are a number of different approaches summarized in my Opening Range Methods article
   
• Pivot Zone as described above
   
• Price Histogram based on volume.
   
• Opening Gap

DOWNLOADS

Original: amgACD.dat ::: Download the template

amgACD.doc ::: Download the template description

Updated: amgACD_ATR.dat
Uses ATR, but must also create a Daily chart with special DYO.
Please read this before using.
 

further reading

As I mentioned earlier on, I do not use ACD strategies across multiple indices as outlined by Fisher in his book. One particular observation is that I often see failures at the A/C. This is not at all a criticism of the method, just my experience. Nevertheless, there are markets when range ("level" or "number" trading) is preferred to trend trading.

After a long absence, the StrategyFX site is again functional and here are two threads you might find of interest. You may have to join the site in order to access or to download any files. The focus here is use of ACD in Forex trading:

ACD FAQ (link to StrategyFX chat site)
ACD FX-Pairs Trading (link to StrategyFX chat site)

Orig: 28 Mar 2005
Update: 15 Sep 2005 to include OR Methods article and StrategyFX links

 

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