Mark Fisher’s ACD Trading System: A Proven Strategy for Market Success
Mark Fisher is no ordinary market participant. The trading system he developed is not just a theory; it’s a practical tool that he and his team of over 75 traders at MBF Clearing Corp. rely on daily in the New York markets. Whether dealing in commodities like natural gas and crude oil or navigating volatile stocks, Fisher’s traders are either actively participating in the commodity pits or making calculated decisions from their computer terminals. The effectiveness of Fisher’s method is evident in the success of his firm, with every trader attesting to the system’s value.
The ACD System: An Overview
In his book, The Logical Trader, Fisher outlines his ACD system, a method he openly shares because he believes its effectiveness grows with more users. The system identifies specific points for entering (A and C points) and exiting (B and D points) trades, making it especially useful in volatile or trending markets. Fisher often cites commodities such as natural gas and crude oil, along with select stocks, as ideal candidates for this strategy due to their high volatility.
Understanding the System in Action
For example, in the S&P 500 Index, the first 15 minutes of trading sets the opening range (OR). An “A up” signal occurs when the index moves above the OR by a set amount, while an “A down” signal is triggered when it falls below the OR. If the index subsequently drops below the OR after an “A up” signal, the trader would reverse their position when a “C down” signal is generated.
Origins of the ACD System
Fisher developed the ACD system during his time as a graduate student at the Wharton School of Business in the early 1980s. He noticed that the opening range of a trading day often set the tone for the day’s market movements. For instance, in crude oil trading, the opening range was the high or low of the day far more often than random chance would suggest. This observation laid the foundation for the ACD system, which many traders use today to gauge market direction based on the opening range.
Applying the ACD System
A trader using the ACD system begins by monitoring global markets and reading relevant commodity reports before the market opens. After the market opens, they focus on the first 15 minutes of trading, marking the high and low of the opening range. The trader waits for an “A up” or “A down” signal, which dictates their entry into the market. If the trade moves in the desired direction, the trader remains in the position, setting stop losses to protect against unfavorable movements.
In rare cases where the market reverses late in the day, generating a “C down” signal after an “A up,” the trader would exit and potentially reverse their position. Fisher notes that such late-day moves can be intense and sometimes warrant holding a position overnight due to expected market gaps at the next opening.
Flexibility Across Time Frames
One of the strengths of the ACD system is its adaptability to different time frames. Day traders might use a five-minute chart, while longer-term traders can apply the system to daily data. Fisher also discusses a “macro ACD” approach, where traders track daily scores to gauge longer-term market trends. This method provides a broader perspective on market direction, making it a valuable tool for those looking to trade over extended periods.
The ACD system is not a one-size-fits-all strategy. It works best with highly volatile, liquid markets that exhibit long trends. While the S&P 500 Index can be used as an example, Fisher suggests that other markets might offer better opportunities for this method. For those interested in mastering the ACD system, further study is essential. Fisher’s book, The Logical Trader, and his website offer valuable resources, including subscription services that provide regular updates on A and C points for various equities and commodities. The principles of the ACD system are powerful, but they represent just the beginning of what Fisher’s strategy can achieve for disciplined traders.
