Fishers ACD Indicator

The Fishers ACD Indicator was discovered and developed by Mark Fisher, a professional trader and founder of MBF Clearing Corp, one of the largest clearing firms on the NYMEX. The indicator was officially introduced in the market through Fisher’s book “The Logical Trader,” which was published in 1999.

What is the Fishers ACD Indicator?

The Fishers ACD Indicator is a technical analysis tool that helps traders identify trend breakouts and evaluate the strength of a trend. It is based on intraday data and is commonly used in the Forex market.

Determining the trend in trading can be challenging as it varies depending on the time frame of the trade. Once identified, traders must evaluate the strength of the trend. Mark Fisher, an independent trader and founder of MBF Clearing Corp, one of the largest clearing firms on the NYMEX, offers techniques in his book “The Logical Trader” for identifying trend breakouts and assessing their strength. One of these techniques is the use of intraday data in the ACD trading system to identify daily opening ranges for trades. This technique may not be suitable for long-term traders, but it can be adapted to a longer time horizon.

Key Features of the Fishers ACD Indicator

  • Uses intraday data to identify the daily opening range for trades.
  • Helps traders spot trend breakouts and evaluate their strength.
  • Can be adapted to a longer time horizon.

Fishers ACD Strategy

Buy Signal

  • The Fishers ACD Indicator sends a buy signal when the current price is above the daily opening range and the trend is considered strong. This indicates that the market is in an uptrend and that it is a good time to buy.
Fishers ACD Indicator Buy Signal
Fishers ACD Indicator Buy Signal

Sell Signal

  • When the Fishers ACD Indicator detects that the current market price is lower than the daily opening range and the trend is considered weak, it sends a signal to traders to sell, suggesting that the market is in a downward trend and it is a favorable time to exit positions.

Fishers ACD Indicator Sell Signal
Fishers ACD Indicator Sell Signal

Opening range provides a wider area with a probability that it will either be the high or the low of the period under examination. The pivot range, whether it is daily or half-yearly, gives another point of reference for support or resistance. By plotting these values on the chart, a trader can immediately see when the stock or market is gaining or losing strength and momentum.

Designating where OR and pivot range are in relation to each other and to the current price helps the trader decide how much confidence can be used when placing a trade. This information is highly useful in making trading decisions. And, like any reliable technical trading technique, it is one that works in all time frames.

Fishers ACD Indicator Pros & Cons

Pros

  • Helps traders identify trend breakouts and evaluate their strength.
  • Can be adapted to a longer time horizon.
  • Based on intraday data.

Cons

  • May not be suitable for long-term traders.
  • Requires a certain level of experience to effectively use.
  • Relies heavily on intraday data, which may not be available for all markets.

Conclusion

The Fishers ACD Indicator is a useful tool for traders to identify potential trend breakouts and gauge the strength of a trend, it utilizes intraday data and is commonly applied in the Forex market. By using daily opening range and pivot range, traders can quickly identify market momentum and make informed decisions. The indicator can also be adapted to different time frames, making it a versatile tool for traders of various styles.