A month of GBP/JPY through the eyes of ACD Methodology Mark Fishers ACD Methodology from The Logical Trader
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Tuesday Jan 15th 2008: 3am - 3am EST
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Comments for Jan 15th 2008:
I have drawn the whole pivot range today in the above chart with pink lines, the solid pink line is the Central Pivot Point and the two Dotted pink lines are the upper and lower Pivot lines. There have been only two days that havent had a bearish bias this month (the 6th and the 7th) so we are looking for downward price action. Despite breaking A-UP and C-UP (which with the break of C we generally change our bias), we bounced off the Pivot range top and retraced back into the Opening Range. Break of the C-Down later in the day confirms further bearish action moving forward.
Could the system have made you money today?:
If you traded short anywhere in the pivot range you could have had a great day here. Thats the great thing about this pair, it really moves. A small trade with limited risk always has the opportunity to run.
1. Following the ACD rules early you see a break of A-Up with a failure of C-Up, but a retrace to the opening range fails before breaking both A and C Levels clearly. Alone this is a signal to change our Bias to bullish for the day, the Central Pivot Point and the pivot range (like the ACD system is from The Logical Trader) is a barrier that has to be crossed before we would see further upside. If you took a long position on the break of C-Up I would take first profit before entering the range in such a case.
2. Failure to breach the entire pivot range and failure of multiple attempts to re-break the CPP is an opportunity to carefully go short. Bullishness is still favoured above the C-Point but the CPP is the best entry point for a short until it is breached. Stop would be on the other side of the pivot range just beyond the recent failure. Anywhere beyond that your just giving money to the market if price action should decide to beat the pivot range.
3. There were numerous other trades on the short side later in the day that you could have made following the ACD system.
4. Leaving anything on the table in the morning would have really payed off by the end of the day with a range of approximately 450 pips!
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