Hello - just one or two more observations:
1 - Only stop and reverse once the first Parabolic SAR dot has appeared in the opposite direction i.e. if your trading platform will only draw the next dot once the current candle has closed - wait for that dot. In other words - don't stop and reverse 'the moment' the Parabolic SAR has been penetrated on, for example, the daily charts i.e. wait for the next day to confirm that the new PSAR dot has been drawn in the opposite direction before stopping and reversing. The reason I say this is that I have noticed that sometimes (pretty often) Parabolic SAR is penetrated by a 'spike' (probably news data) and then the price retracts and carries on in the same direction it was going in the first place. This is against what I said before i.e. IMMEDIATELY stop and reverse when Parabolic SAR is penetrated but in hindsight and with a little more investigation I don't think that this is correct. Also - thinking about it - when this indicator was devised - the trader would only have known at the close of the day that Parabolic SAR had been penetrated i.e. they did not have realtime data like we do so they would only have stopped and reversed if the daily closing price had indeed penetrated Parabolic SAR on close.
2 - I have also noticed that when the Parabolic SAR dots form an 'arc' or 'curve' from the get go then this position turns into profit soon and there is pretty much no doubt. I have noticed (in most cases anyway) that when the first few dots are sort of close together and form in a straight line i.e. no 'curve' and 'closely spaced' then you should maybe not be in this trade i.e. it's like there is no 'conviction' to the price movement and what appears to normally happen in this case is that the price sort of 'hangs around' and a reversal in the opposite direction of Parabolic SAR is imminent.
Just my 'forex trillion dollars' worth.
Any thoughts?
Regards,
Dale.
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