Calculation of failed Point A of the ACD system by Mark Fisher
  1. Data for testing
  2. Point A
  3. Failed Point A
  4. Point C
  5. Pivot range
  6. W-pivot range -new
  7. Points A and C through the pivot
  8. Closing method -new
  9. Dynamics of Points A and C
  10. Significant time frames
  11. Entry and exit


3. Failed Point A

According to the ACD theory, when the market does not reach A value by 1 tick and reverses, we have a failed Point A. As soon as the market moves a few ticks from the value A back to the opening range, the position is opened. I used 5 ticks in the calculations, as Mark Fisher suggests in The Logical Trader (see Page 25). If the market reverses and breaks through A value, the position is closed by stop loss at Point A. Mark Fisher calls this trade a rubber band.

The results of this calculation for SBER stocks are presented in Table A.4 in the Appendix. It makes sence to compare it with Table A.3 for good Point A. It is worth noting the following for failed Point A:

Average profit and p/l for breakout levels from 0 to 100 ticks in case of entry from failed Point A for different opening range time frames and securities are presented in Table A.11 in the Appendix (see the 5th row for each security).

Another kind of failed Point A occurs when the market breaks through A value, but does not stay there for half the opening range time frame, then reverses and trades back into the opening range. No calculations were made for a failed point A of this type, since it cannot be used to open a trade.