Hello Baby Pippers,
I have as of late been experimenting with multiple combinations of Parabolic Sars, combined with an mt4 indicator called the engine have been giving me superb entries, and great exits too. I will give you all the setup and you can play with it a bit yourselves. It is a perfect trading system for a trending market. Sometimes I get beat up a bit during consolidations but I make it up on the runs.
- Install the engine indicator on your MT4 platform
- Install the parabolic sars on a chart, any chart, any chart at all. (sounds like I am playing pick a card!) Set the step on the sars to .05 and the maximum to .2 and color it black.
- Install another parabolic sars on a chart, and set the step to .03 and the maximum to .2 and color it yellow.
- Install one more sars on the chart with the step set to .01 and the maximum to .2 and color it white.
That is your mechanical setup. Now, I will explain what you are to be looking for to facilitate an entry.
Trading with the trend is always best. (If there happens to be one, If there is not, maybe we should go to a movie or something. Tennis anyone?). But it is not a requirement for this type of Parabolic Sars trading.
I do however recommend that if you are trading against the trend that you set a lower target.
- Ideally, you want an engine pointing in the same direction of your trend, which will give you the directionality of your trade. Hold your horses there Tonto, The Lone Ranger ain’t ready to ride yet. (every wonder why the apostrophe is in ain’t? What two words is it connecting? Hmmmmm?
- I then wait for my black and my yellow Parabolics to Flip in the direction of the potential trade. I want it underneath the candle if going long, and above the candle if going short. (Raise the price up, or push the price down is the way that I was taught.)
- This is my entry signal. Enter the trade in the direction indicated by your engine arrow, and your confirming Parabolic Sars.
Now for my exit signals: - If I am in a heavily trending market, I will not exit the trade until all three Sars black, yellow, and white have turned against me. (assuming I have garned a fair amount of pips, otherwise I will use the exit below.
- If the market is moving about as much as a dead parrot being attacked by a rabid dingo, inother words, not so much, I will exit as sonn as one Sars flips. If the chances of the trade look good to continue, as verified by any other confirming indicator. Lately, I like the CCI with the levels set to +50 and -50. But you can use any indicator for confirmation that you like. Stochastics, whatever. If my confirming indicator agrees with the Sars that it is time to leave the trade, I will. Otherwise I will wait for one more Sar to turn against me.
Give this a try, and let me know if you have any problems or questions with it and I will be glad to help you out.
Trade Safe,
Dr. Bob