Parabolic SAR - that's all!

[dpaterso]

Hi alan003,

Parabolic SAR is an indicator than normally comes standard with any trading platform (software). I also have not used or looked at Dailyfx but I would imagine that because they are a major contributer to the analyst threads on this website that they would definitely have Parabolic SAR (or SAR) as an available indicator on their own trading platforms charting tools.

In other words - the three brokers that I use - all have Parabolic SAR 'built in' as an available indicator on their respective trading platforms.

You have to look at your software.

Regards,

Dale.

[MakeMoneyorDIE]

YES> DailyFX has that under there chart software

[lilax]

So what is your Entry points? Do you watch all month/week/day charts at PSAR to change direction or you only stick to a one day chart?
Can you show a screenshot of your traders?

[dpaterso]

Hi,

See attached chart for entry points.

You can use Parabolic SAR on any timeframe - I will only use the Daily and longer - as the shorter timeframes give too many false signals - and after spending much time studying the theory behind this indicator - am of the opinion that this indicator was specifically designed to be used on the daily charts i.e. on a daily basis.

I'll tell you one thing though: I posted this chart because it was unclear or rather debateable to me whether or not I had actually explained (or needed to explain) the entry points and I was in doubt. With regard to your second question though: there is no way you could have read this entire thread and got a good undertstanding of the indicator and what it is about etc. etc. and still be asking this question. Beware: you need to understand what you are doing - otherwise - you WILL lose money - and lots of it. Do not just 'skim' over this thread and see references to the profits that I have made - and think that this is the shortcut to 'huge' profits - it's not.

Regards,

Dale.

[orbe80]

Hi Dale.
you say you stop and reverse, but you have also said that you would only trade with the main trend. so what if the main trend is long, you go long and then it reverses, but the main trend is still long?

Orjan

[dpaterso]

Hi,

No - I never said that I would only trade with the main trend (that was someone else). I was going to have a look to see whether or not it would be viable to ensure that the Monthly, Weekly, and Daily Parabolic SAR was going in the same direction but upon further investigation it would appear that the chances of this happening often enough to provide valid entry points on the Daily charts are not very high. While I'm sure that there is no doubt that if you were able to find that Parabolic SAR on the Monthly, Weekly, and Daily charts was moving in the same direction your profits would be all but 'guaranteed' but I think that you would make very few trades over a very long period of time. I'm prepared to, and have the capital to be able to take the 'whipsaws', to trade only the Daily charts, based pureley on signals given by Parabolic SAR regardless of the direction of any other trends on any other timeframe. Put it this way - I have never done it any other way - and it still works for me.

What I did say though is that IF you needed confirmation from a longer timeframe the only way that I could see that you could get this confirmation is to look at ONLY ONE higher timeframe i.e. you could verify the Weekly trend, and then trade only the Daily, you could verify the Daily, and then trade only the four hour, etc. etc. etc. Trying to get confirmation from the Monthly, Weekly, and Daily would, once again, in my opinion, result in very few trades - and - if you're wrong - you'd have to wait far too long to make up your initial loss and then turn a profit thereafter.

Regards,

Dale.

[orbe80]

ok, thanks. and sorry for the mixup.

[dpaterso]

Good Morning (Evening)!

I don't know what's going on with the markets in general - it seems like everyone has gone to sleep after last weeks action! It was not even worth staying up until midnight tonight to adjust stops and check for new positions or to stop and reverse positions! Even the Dow has been in a tight range this week so far! It's killing me - especially after last weeks euphoria! Is there a big announcement or something coming for somewhere that I don't know about?

Anyway - plodding along:

Wednesday, 22/08/2007
18h29 New York Time
00h29 South African Time
01h29 Bulgarian Time

Valid Parabolic SAR Entry Points (Daily Charts):

EUR/ZAR - Short *
GBP/NZD - Short

Parabolic SAR Watch List (Daily Charts):

EUR/NZD
EUR/SEK
GBP/AUD
GBP/JPY
GBP/USD
NZD/CAD
NZD/CHF
NZD/JPY
NZD/USD

* REALLY not happy with this entry at the moment i.e. China raised interest rates again yesterday and this normally results in the Gold price going down and the ZAR therefore weakening against almost everything else BUT let's see what happens.

You will notice that although the Parabolic SAR Watch List is becoming shorter (the price of pairs listed the previous day has continued to move away from a reversal point) a few of the pairs keep coming up on this list so I'm hoping that some nice reversals are on their way.

You will notice that in a previous message (yesterday morning early) I was jumping up and down with excitement as there were a few pairs where I thought that a valid Parabolic SAR Entry Point was about to appear and was even thinking of second guessing the indicator in order to get in early. I am mentioning this because a few months ago I would have second guessed the indicator and would now be sitting with and carrying huge losses. Now I know better. The point I'm trying to make: NEVER TRY TO SECOND GUESS THIS INDICATOR!!! At best case - you'll carry losses with you for a while - assuming you don't get stopped out. At worst case - you'll get stopped out and lose a whole lot of money unecessarily. Been there - done it - got the t-shirt!!!

Good trading.

Goodnight.

Regards,

Dale.

[dpaterso]

Good Morning (Evening).

Well - it seems that things are now starting to look up i.e. many new positions opened this morning (evening).

Thursday, 23/08/2007
19h25 New York Time
01h25 South African Time
02h25 Bulgarian Time

Valid Parabolic SAR Entry Points (Daily Charts):

AUD/CHF - Long *
AUD/USD - Long *
CHF/BGN - Short
EUR/CHF - Long
EUR/ZAR - Short
GBP/NZD - Short
NZD/CAD - Long *
NZD/CHF - Long
NZD/JPY - Long *
NZD/USD - Long

* Now I need some help - see below!

Thursday, 23/08/2007
19h25 New York Time
01h25 South African Time
02h25 Bulgarian Time

Parabolic SAR Watch List (Daily Charts):

AUD/CAD
EUR/RON
EUR/SEK
USD/RON
USD/SEK
USD/TRY

* Now I need some help!

Please take a look at the attached daily chart of AUD/CHF. You will notice that a new Parabolic SAR dot has NOT been drawn at the bottom of the chart which would denote a reversal BUT instead the previous or current Parabolic SAR 'trend' as it were appears to be continuing. What is strange though is that Parabolic SAR was penetrated the day before i.e. yesterday. I have NEVER seen this before with Parabolic SAR and don't know what it means. Please would somebody check their representation of Parabolic SAR for this pair (all the other pairs that I have marked with an asterisk above are all exhibiting the same strange representation of Parabolic SAR). Your thoughts on this would be appreciated. I have however opened positions based on the fact that Parabolic SAR was penetrated and in my mind SHOULD have drawn a dot at the bottom of the chart indicating a reversal but I'm not entirely sure that this was the right thing to do. Like I said - I have NEVER seen this before.

Regards,

Dale.

[dpaterso]

Good day.

OK - well - sorry I did not update this thread last night (if anyone is monitoring that is) - I did get out of bed to update my positions and move stops etc. etc. - but it is now taking much longer because of the number of positions - and to still update this thread would have meant very little sleep!!!

I think that this will be my last update on this thread - simply because by now - I hope - that anyone monitoring this thread - and possibly using 'pure' Parabolic SAR as I like to call it - has got the picture. I am subscribed to this thread, however, so if you want to discuss anything, or add something, then I'll be notified so please feel free to do so.

Friday, 24/08/2007
19h31 New York Time
01h31 South African Time
02h31 Bulgarian Time

Valid Parabolic SAR Entry Points (Daily Charts):

AUD/CAD - Long
AUD/JPY - Long (breaking the rules here - trading four hour for fun)
CAD/JPY - Long
EUR/AUD - Short
EUR/GBP - Short
EUR/JPY - Long
EUR/RON - Short
EUR/SEK - Short
GBP/BGN - Long
GBP/CHF - Long
USD/RON - Short
USD/TRY - Short

Friday, 24/08/2007
19h31 New York Time
01h31 South African Time
02h31 Bulgarian Time

Parabolic SAR Watch List (Daily Charts):

Did not find anything pending

Anyway (I know I said I would no longer post my profit/loss position in monetary terms BUT it will just take to long to calculate PIP's given the number of positions / pairs that I have open i.e at present 33 positions / pairs - running out of available pairs) I am currently on $8148.12 profit (and at some point yesterday it was even as high as over $23K but I'm sticking to the indicator this time round no matter what - it has also gone down to as much as -$3K). I have also not been stopped out or had to stop and reverse yet on any of my positions / pairs i.e. no confirmed losses as yet. I will post my total profit (yes profit - not loss) made on the first day of next month for interest sake. So far - 'pure' Parabolic SAR - works for me (it's keeping me out of sleep though)!!!

Good luck (I hate that phrase - when anyone asks me if I've had any 'luck' trading today I want to rip their head off - ask me how business went today and I'll tell you - trading is not luck - it's f*****g hard work mate)!!!

Good trading!!!

Actually - in closing - I found a good way of describing what you are doing by using 'pure' Parabolic SAR - your are 'tradevesting' as opposed to just 'trading'. In other words - don't look for short term profits using this indicator - you may get 'lucky' (like my $50K last week) in the short term - but in the long term - you'll increase your account balance quite substantially I reckon by just 'mechanically tradevesting' using this indicator as it was originally designed.

Thank you Mr J. Welles Wilder Jnr.

Regards,

Dale.