Over the past year I've been learning how to become a successful equity options trader. I've read various books about using technical analysis, options strategies, behavioral finance, and trader psychology when planning, entering, and exiting trades.
Through trading, I've learned alot about my own analytical strengths and emotional weaknesses (I've made just about every mistake I've read about). I enjoyed reading about the ACD methodology, as well as Mark's personal trading stories. I like that the methodology helps the trader to find reference points for entering and exiting high reward/low risk trades, while identifying areas of support and resistance for risk management. I agree that the most important part of trading is establishing and maintaining discipline (which I've found to be alot harder in practice). The most powerful aspect of the ACD methodology is that it is designed to help enforce discipline in your particular trading style.
As for the missing "proprietary" A and C values, the Logical Trader website has a Q&A page [...] which describes how to calculate A and C values for a stock:
Q. How can I get the A-C value for a stock that is not listed in the ACD stock reports?
A. A good approximation of the current "a" value for any stock would be to take the 30 day avg. range (h-l) and use 20-25% of this value.
Since I usually hold positions between one to ten trading days, I'm going to try out a version of a reviewer's formula for calculating A-C values: (Opening Range High + (20% of 10-Day Average True Range)) and (Opening Range Low - (20% of 10-Day Average True Range)).
I have a huge library of trading books anything from McGee, Murphy, Pring, Kaufman, Bernstein, Cooper you get the idea. This little gem would have to be one of the best.
Over the years I've studied and used a lot of techniques and systems, finally working out something that works for me. I got this book on the recommendation of another trader and was quite surprised to see that the ACD and pivot range techniques he uses are similar to what I use. I didn't invent these systems or techniques, I just borrowed from here and there to put my system together. I intra day trade indexes and stocks so I find the use of these systems ideal for my trading paramters.
I stumbled upon using the techniques that I use through luck or hard work, but here they are in The Logical Trader, in a far more elegantly described, quantified and elucidated form than I could ever articulate. Fisher's system gives you the confidence to trade, to know when to push and also to know when to bail. I cannot recommend the book highly enough. The system is boring and very profitable, as it should be. Best of luck to all.
This book is so effective I own two copies just in case it goes out of print. The method is simple, but only gets simple after a focused period of study and simulated testing using the opening range concept, AC entry points and other ideas mentioned in the book. I have used the AC points in the index and they have worked consistently even though they are dated. I trade in the day time frame using the e-minis, and it does appear (from looking at the data) that human behavior in these markets have a tendency to repeat patterns and revisit old memories, thus the effectiveness of the AC points in the index as entry points, and pivot ranges as areas of significant support,resistance and risk control. To be successful using this method requires patience, discipline and experience testing the system. After a year of simulation and data analysis this system has consistently performed at the highest levels. One needs to read the book with an open mind, test the method (try 30 days) and analyze the results, keep it simple and stay disciplined. Then give it the ultimate test and trade real money. I guarantee failure if you second guess the system and demean your self confidence, and success if you show trust in the system and yourself. From my perspective trading is 99% psychological and 1% effective methodology. I delivered a five star rating because the ACD method best suits my day time frame, short term trading psychology.
Unfortunately this book which promises so much is just another "Bait and Switch"... I am a full time trader of 10 years, very experienced and I like to explore new ideas that people come up with but the trading approach in this book is heavily dependant on the authors "secret" formula.. BUT... already on page 14 the author states speaking of his approach...."These variables are based on our own proprietary research, the process of which I won't share with you except to say that the ACD values are based on the volatility measurements of a particular stock.." ... SO WHAT DID I PAY $50 ##### BUCKS FOR THIS BOOK THEN IF YOU ARE NOT GOING TO REVEAL YOUR FORMULAS TO ME??? I read this book twice and I am so SICK and TIRED of ordering a book promising some new approach to the stock market and then you DON'T GET WHAT IS PROMISED!!!!!! There is a lot of technical jargon in this book.. all of which does not make sense unless you have the formula which the author states in the beginning of the book he is not going to give you! Its one thing when you receive a cheesy spam email promising you a new trading technique absolutely FREE and then they try to sucker you into signing up and paying to get the full info. But I already payed $[...] bucks for this book... why do I have to pay more by signing up the authors website to make the book functional??? BAIT AND SWITCH. All the glowing reviews of this book are probably friends of the author to help him advertise... If the author would like to contact me directly and clarify things for me.. maybe I am mistaken... and I will gladly retract my negative review, but until then I cannot reccomend this book. MARK FISHER email me at [...] and tell me why you can't give the PAYING customers who bought your book the entirety of your system. Not a happy camper here.
I will spare you from a synopsis of this book and get straight to the pros and cons of what this book is about. First of all, I want to say that I adopted the ACD method and am having some great success with it. This does not mean you will though. I have read many books on systems and have only really felt connected with this system. If your looking for others books
on par or above this check out Carter's "Mastering the Trade," Douglas' "Disciplined Trader" and "Trading in the Zone."
Pros:
-The thing that is really great about Fisher's system is that it is very flexible. It is not for novices though. It is not a black box system, it is simply a loose structure that (after mastering) gives more freedom with trading.
-It can be applied to any trading entity. This point really cannot be pushed enough. A lot of traders do not understand how important this fact is. The ability to apply a Good C Up Through Pivot (What Fisher claims is a high probability trade) to ANY entity in trading will have you trading better opportunities more often, unlike, say, Carter's TICK fading system that can only be applied to the main Eminis.
-The choice is in your hands. This is not a system that overrides your pyschology in an attempt to dampen your natural reactions to market events. All too often we are told that we need to eliminate fear and greed from the equation, but in reality, suppression of these emotions can create sub par results. It is only after accepting and working with your own unique psychology that you can maximize your trading (see "The Disciplined Trader").
-You get to pick the other indicators. For example, you really only need to nab the opening range and the A values to create your own system. Instead of C values and his pivots, you could use the daily pivots like r1 r2 s1 s2, etc. Or support and resistances from other sources, or even stochastics, MACD, or anything else really that is to your taste.
-The ease with which a day trade can become a swing trade or vice versa. Because of the flexibility in this system, and the rules he lays out, it is easy to see when to take a day trade over night and when to sell it, all based on the probabilities that that day presents. This system is VERY good at showing you when you can press your bets and when you can test the waters, all with the probabilities ON YOUR SIDE.
Cons
-I think the major con that most people complain about is the fact that Fisher does not provide the ways to calculate the A and C values. If you go to his website though and read his Q&A, he tells you that when in doubt, take 25 percent of the 30 day average range of said entity. This equation is quite simple with most charting technologies (AVG30(H-L) comes to mind). I trade this system and I do not subscribe to anything of his and it works quite well. At the moment, for the QQQQ, the A value is 13 cents.
-I wish the "Macro ACD" chapter was a bit clearer. While I understand the reasoning behind it, he only really hints at what it means that a -9 or +9 day occurs; does this mean we should go long/short for the long run? Does it mean that that day will be a trending day? A chop day? should we look for a new trend to start (what I suspect)?
-The information provided in this book is not well laid out. I had to reread many sections, and between the lines to really get across what he was trying to say in certain parts. And part of the reason I was even able to discern those facts is because I have experience with other systems and trading in general, a novice would be hard pressed IMO to create a working system from this book.
Conclusion: All in all, I believe this book was worth the price FOR ME. If you already have a system that works for you, by all means, don't throw your money at this book. It can be easily summed up by saying. Take your favorite day trading time segment (ex. 5 minute), put lines at the first bar of the day or this segment, aka "opening range," take 25percent of that entity's 30day average range(H-L), put lines above and below the "opening range" by this number, use all lines as support and resistance, and apply any other indicators you like to them. But then again, most really good systems are simple like that, they simply let the trader's experience guide them. This book will have a place on my bookshelf for sure, but I doubt I would put it with "Reminiscences" like PTJ
In the course of 25 years, I've traded on the floors of the (3) major exchanges (stocks, options, and futures) as well as trading upstairs for a leading "prop trading house", and for my own account.
Suffice it to say I've interrogated and/or tested out a wide variety of 'systems'--and the fact is Mark Fisher's approach is actually one of very few that have merit. For (4) very logical reasons.
Reason #1.
When followed properly, the ACD Method can work for just about any actively traded product. Stocks, futures, and some fixed income products--as long as you have access to real-time data, a good charting package, and the ability to execute in quick fashion...
Reason #2. Fisher has incorporated a quantitative approach that involved significant back-testing..Pretty straight-forward thinking--every product trades based on trends. And the trade date speaks for it self..Its understanding how to interpret it without overthinking it.
Reason #3 Perhaps the most important--"Fish" has been using this system since he first developed it at Wharton 25 years ago. Its commmon knowledge within the New York and Chicago trading floor markets that he's one of the most consistently profitable traders in the industry---and explains why Trader Monthly Magazine included him in their Top 5 Best of The Rest listing--(their poll is apparently based on rumored annual earnings)..Each of his prop traders--(rumor is that more than 50 are managing capital that he's put up} are required to use this approach...I've asked around...most have been with him for 10 years or more, and those that have left have simply done so because they made so much money, they decided to set up their own prop trading businesses.
The "system" as he explains in the book, is a function of the user embracing a disciplined approach..Hitting singles, riding profits, and taking loses without any emotion is the most fundamental aspect of successful trading..If you don't embrace that, there's no system in the world, including Fisher's ACD Approach, that will work.
Reason #4. When you read the book, you'll want to read it twice--you need to appreciate some basic mathematic principles, and you need to be able to understand how to follow a variety of diagrams (he makes it easy...ACD Method is available on a daily basis via a subscription service over a website.)..
There's never a guarantee when it comes to trading...but between the approach, and the philosophy that Fisher imparts on the reader, this is really very logical.
Product Details :
Hardcover: 272 pages
Publisher: John Wiley & Sons; 1 edition (July 2002)
Language: English
ISBN-10: 0471215511
ISBN-13: 978-0471215516
Product Dimensions: 6.4 x 1 x 9.2 inches
More Details about The Logical Trader 1st edition
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