Parabolic SAR - that's all!

[SpacePip]

Originally Posted by dpaterso

Hello again.

OK - well - I thought I had better just update this thread again tonight.

Things appear to be hectic tonight!!!

Three new positions:

GBP/ZAR - Short (Gold had better keep going up)!!!
USD/NOK - Short (I have no idea why but I seem to have missed this one earlier in the day)
USD/JPY - Long (Yes - I took it - Parabolic SAR was penetrated while I was working now)

Sorry about that!


Regards,

Dale.

dpaterson, I just wanted to thank-you for reacquainting me with Parabolic SAR. About 6 months ago, I was using this same system. Results were very good, however I could not decide on where to place my stops. I also grew bored of the lack of trades. ( I love trading alot, or at least I used to) I have been following systems that trade 1 time a day. And have gotten accustomed to trading only once a day, more then that and I need a day off LOL.
Anyways, when you said to use to Value of the SAR to determine the stop loss, everything pulled back into place. However, for my trading I will be focusing on only on 1-4 markets, and really only 1 GBP/USD. After doing some back-testing on GBP/USD I have dropped my old system and will concentrate on GBP/USD only right now and build profit through money management. If I can obtain similar results to back-testing I will be thrilled. My Back tested results for anyone that is interested are from Jan 2006 to current:

Jan-Dec 2006 3895 pips 325pip Avg/month
Jan-August 2007 3048pips 381pip Avg/month
Current run up +322 pips

This was definately enough information to get me to dump my old systems. I am waiting to jump into next GBP/USD reverse. Again, Thank-you so much!!!

[dpaterso]

Hey SpacePip:

It's only a pleasure - and the thanks is very much appreciated.

I'll tell you that after all of this there is one thing that is REALLY bugging me:

Since 7 August 2007 (as stated before) my Capital Gain was around 159% as of yesterday afternoon before market open (and I can tell you that between last night and this morning that percentage is probably over the 180% mark).

When I was still 'floating around' and trying to get direction a couple of months ago I asked one or two brokers what their traders (they all have traders for their managed accounts) aim for - hoping that their info would 'force' me to take profits at a certain point as this has always been my downfall - and both of them basically told me that they aim for around 1% per day. Now I'm not sure what that equates to over a period of a month but I'm pretty sure that it's nowhere near 180% or thereabouts.

Why is this worrying me? Well - my profits so far seem to be too good to be true. Either that - or I have indeed found the 'Holy Grail' of 'systems' (which unfortuantely I doubt very much). Of course the possibility also exists that the traders at the brokers are indeed making FAR more than 1% per day and keeping the rest for themselves. Quite frankly I don't have the answer.

I have tried this 'system' three times now and all three times have turned (a very good) profit - that's a 100% success rate. How many times do I have to do this to prove to myself (and everyone else for that matter) that it is indeed a 'system' and not just 'being in the right place at the right time'? Get my drift?

Admittedly I have never (on all three occasions) let the whole thing run to maturity i.e. just keep going and following Parabolic SAR 'to the letter' and wait until I have performed at least three or four stop and reverse actions on all of the positions and then check the results - I've taken profit when I could not stand the idea of losing THAT much money if I'm wrong about all of this - so I suppose I have not 'really' proved this 'system' as yet. Also - to be brutally honest - my debts have climbed and climbed since I started trading - so although these HUGE profits are great - at the moment - they are '**** in the ocean' and I suppose that's another reason why I don't let the trades run to 'prove' this 'system'.

I keep thinking to myself - what if the value of the USD goes 'totally pear shaped' - what would happen then? Then I realise that even if this happened - I'm not any single currency 'heavy' if you know what I mean - if this happened - the other related currencies would make up for this (I think) and I may not make HUGE profits but I'd be making profits nonetheless.

Again: the pshycology of trading comes into play - and you realise just how badly trading for a living can affect you. I mean - you're not happy when you're losing money - and you're not happy when you're making money!!! This goes against human nature and is a total 'mind ****'!

I've also been asked why, if this is working so well, am I giving it away to everyone. The first reason is that I hope to save anybody new to trading the pain and anguish that I've been through over the past couple of months due to my losses AND (of course) the more people following the same system at the same broker will of course help my (and their) cause i.e. if EVERYONE is buying USD and selling GBP then it becomes a self fulfilling prophecy does it not? Good for you. Good for me.

Of all of the messages that I've posted in this thread the answer to the above questions are probably more important than anything else - so any input, advice, or just general comment, would really be much appreciated.

Regards,

Dale.

[popeyeuk]

Just a quick one guy's.. Is there anywhere an indicator for Metatrader for the PSAR that will email us when the dot appears. I am just thinking it would be easier than manually checking up to 40 pairs. If this does prove to work in the long run it would work with an EA quite well. Then we could leave it running whilst we are on the beach in Malibu

[jimocean]

My personal experience tells me that MACD

is quite a lagging indicator.......


i wonder anyone prefer to use the stochastic or RSI ?

[droesparky]

here is a couple audiable alerts for parsar not email.

[jacioux]

Dale,

I just wanted to give you a thumbs up on the ides and the system you are testing, I never really used the PSAR but after reading and doing a little backing testing i can see what you mean by multipul positions. I enjoy reading your posts and comments and look forward to learning more.

Thanks

[droesparky]

here is a interesting indicator for parsar, its a multi timeframe set of bars you can set them to any of the tfs.

[byculla]

Spacepip and others,
Thanks for your info. Have a question. In doing your back testing did you :

Follow money management procedures ?
What was your starting capital ?
How many lots were you trading. ?
Which markets and pairs did you include in youe backtest.

What software do you use for backtesting and any sugestions on a backtesting/ strategy testing software for non-programmers?

The beauty of this PSAR's strategy is the simplisity and preciseness of it's entry and exits. Are there any similar indicators? Building upon this firm base of PSAR's one could I presume add other indicators that would prevent one from entering a sideways market. In so doing, one could maybe get a better system. Keeping in mind that PSAR's is the base.

Another similar type of indicators is the Chandelier Stop. It would be an interesting and maybe economically beneficial exercise if this could be similarly backtested to see how it compares with your PSAR backtest.

This is a most interesting and active thread. Thank you dpaterso for your insightful idea and to all others for your contribution.

[dpaterso]

Hello - everybody - nice to see some new names here.

Thanks for the posts and comments and Metatrader Custom Indicators.

Keep them coming.

By the way - for those of you that don't know (just for interest sake) do you know that the 'standard' OsMA Indicator that comes with Metatrader is ACTUALLY (the same as 'classic' MACD)? I didn't know that (only found out a couple of weeks ago). The default settings are identical to MACD and basically when the Oscillator crosses the zero line it is exactly the same thing as when the 'classic' MACD line crosses the MACD signal line! Take a look. On the occasions that I've used it I find it's sort of 'cleaner' i.e. you ONLY have the Oscillator in front of you and not the lines - it's become easier for me to use like that.

And it's only a pleasure (updating this thread).

Regards,

Dale.

[dpaterso]

Hey byculla:

What is the 'Chandelier Stop'? Nice name - but I've never come across it before.

Edit:

You know - it's funny - I've been meaning to post this comment for the past couple of weeks now: Why does NOTHING every happen on a Monday? Have you ever noticed how quiet things are market wise on Mondays? Nothing happens! It kills me - and - if I could calculate the statistics of all the bad trades and losses I've made in the last couple of months - I'd be willing to bet that I opened all of the losing positions on a Monday! The crazy thing is - all my life I've wanted a job where my work week started on a Tuesday i.e. longer weekend. Now I've found one - and it p****s me off (on a Monday)!!!

Regards,

Dale.