[dpaterso]

Hey Ingot54,

I've been sitting having a look at your theory and I think it's great.

I think, though, that just by looking closely (on EUR/SEK anyway) that for this idea to be REALLY successful the time frame needs to be EVEN SHORTER and not JUST A LITTLE BIT SHORTER if that makes sense. In other words - there is not enough difference between the daily and the 16 hour (in my case) BUT there is a big difference between the daily and the 12 hour (in my case).

Actually - now that I think about it - while I'm typing this message - you have the right idea BUT there is a problem with it and I'll tell you why.

Remember that Parabolic SAR is calculated specific to the time frame so this is not going to have the desired effect.

But - like I said - I think you have the right idea - BUT - what we need to do is to somehow 'overlay' the Parabolic SAR from the daily time frame (or whatever your 'primary' time frame is) on the next lower time frame. Think about that statement for a while. Doing THAT is totally different from just using the Parabolic SAR for the lower time frame.

Am I making sense.

Another way of explaining is this:

I got a valid Parabolic SAR entry point last night on EUR/SEK to go long (daily charts). If I check where my initial stop loss is supposed to be on the daily time frame - let's say it should be at 9.3291 based on the value of Parabolic SAR on the daily time frame - BUT - if I 'flip' to the 16 hour time frame - and use those Parabolic SAR values - then my initial stop loss should theoretically be at 9.3261 if I based it on the current value of Parabolic SAR on the 16 hour time frame. In other words - the indicated value of my stop is LESS or LOWER on the 16 hour time frame than it is on the daily time frame (remember I'm long here) - and that's not what we are trying to accomplish i.e. it should be HIGHER on the shorter time frame in this case and not lower.

The only thing that I'm not sure about when making the above observation is whether or not Parabolic SAR will accelerate faster on the 16 hour time frame - in which case I'm talking nonsene above. To be honest - this pair is probably a very bad example because it is stuck in a range - so that could be why I'm getting the results I'm getting.

Actually - let me go and check this on another pair - and then I'll come back here.

By the way - I've been meaning to ask you - coming from Australia and all - what do you think of my thoughts on Gold and AUD/NZD/ZAR? The problem is that things are so good in Australia ANYWAY that I don't think a drop in the Gold price is going to make NEARLY as much on AUD/??? as I think it is. And that may even be true of the ZAR actually i.e. our interest rates are going through the roof and, as a matter of fact, I got an interesting email from Saxo Bank the other day - saying that if this trend continues - South Africa may very well become the 'darling of the carry trade' by the end of the year.

Edit - very important edit!!!

No - I'm talking absolute nonsense above. Sorry - you are 'bang on the mark'. EUR/SEK is a terrible example at the moment because it is range bound BUT if you use your strategy on a pair that is actually trending - what happens is that Parabolic SAR on the lower / shorter time frame (actually - is time frame two words or one?) starts accelerating much faster on the lower / shorter time frame so your stop / take profit moves slightly faster and thus would give you some extra PIP's when the reversal comes and Parabolic SAR signals a reverse.

Sorry - you are quite right.

I have left my initial thoughts posted (as above) i.e. not deleted them after I realised that you are actually quite right - just so that they are there as food for thought.

I think you've made a breakthrough my man - and - it's especially great because you are not introducing anything else to the 'mix' i.e. still 'pure' Parabolic SAR.

And yet another edit:

Man I like this idea - it's good. The only thing that I would say is that you stick with working on your 'primary' timeframe (I've decided - it's one word now) UNTIL you are 'in the green' or profitable AND Parabolic SAR has moved past your opening price therefore now is 'locking in' profits AND THEN switch to the lower / shorter timeframe to lock in profits otherwise you may increase your chances of being whipsawed out of a perfectly good 'primary' trade (in my case it would be the trade based on the daily timeframe).

OK - I'll step back now and wait for some input / thoughts on all of this.

And yet another edit:

By the way - I managed to 'scrounge' another position today - long on USD/RON.

Regards,

Dale.