Parabolic SAR - that's all!

[rdquintas]

Originally Posted by daxm

I'm a newbie so I can only quote from the books of "professionals" that I've read. However, I would say that you should trade mini/micro lots. Whichever works "in your budget". I'm not sure how you are calculating the 2%. Is that your margin or how much you stand to loose that must be within the 2% mark? I'd think you'd be concerned about your Stop Loss requirements.

So, lets assume you trade mini lots. That would "cost" you about (depending on the currency pair) $1 per pip. Therefore, you could withstand a string of 100 pip Stop Loss hits with a $2000 account only 20 times (a little less than 20 times, due to margin reservations). This means you would be risking a potential loss of 5% on your initial account. BUT if you trade the same lot size but had $5000 funded account you would be at your 2% risk! You could withstand almost 50 losses in a row! (Not that ANYONE would want that but you need to be mentally prepared for a string of losses.) Frankly though, if you really follow your 2% rule you should never let your account be less funded that $5000 because after your first loss that dips you below $5000 you are now going to have to risk more than your 2% limit on your next trade (assuming the 100 pip Stop Loss mentioned above).

Boy am on in a chatty mood today! Anyhoo... one more piece of advice I've gleaned from my readings. Don't give up on your trading strategy just because you have a string of losses. That is normal. Just remember: "Plan your trade and TRADE YOUR PLAN!" :-)

Once again, thanks for your LONG and DETAILED reply.
But still...

With parabolic sar, if you apply your SL on the dots indicated by the parabolic sar, as I mentioned above, 200 pip is the "normal" situation. Not 100 as you gave on your example.
I've seen other cases where you parabolic dot is, sometimes, 300... or even 500 pips!!!! distance

So I really think is quite dificult (not to say impossible) for you to apply your SL on the dots, while at the same time keep your risk =< 2%.

btw, when I talk about risk I'm thinking like this:
If I have a 2.000 USD account and I want to risk 2% of my capital, I will put my SL 40 pips (= 40 USD) away from my open price.
I believe I'm correct here, no ?

It seems that even with a 5.000 USD account you only have a buffer of 100 pips (again the 2% rule here) , not flexible enough if you want to put your SL on the parabolic dots.

I'm also a newbie...

[ChuckNorris]

Ok i am almost done here.

Maybe one final word about forex. Guys do forex as a hobby when you have $1 000 to waste and you don't know what to spend it on. As for opening $5 000 -$10 000 accounts please don't do it. Please don't think you are gonna make a living trading forex. It is not gonna happen. You might win a $1 000 the one week, only to give it back the next week.

If you google the top 50 richest people in the world you won't find one forex trader among them. In fact I have never talked to, or seen a rich forex trader. Yes i have heard lots of urban legends about 22 year olds driving around in ferraris, or traders who turned $1 000 into $100 000 in a week, but then again I have also heard a lot of rumors about Big Foot and the Lochness Monster.

I drawn my conclusion once i saw every single respectable trader (Rob Booker, Jerry Furst, Ed Ponsi, Tony Juste, Adam Rosen, Ian Copsey, Kathy Lien, Boris Schlossberg,) offering mentoring at a monthly rate. I mean these are the guys that are the experts. They have all written forex best sellers. And they are guest speakers at forex conferences. Then I wondered why they would rather spend 1-4 hours a day teaching forex instead of using that time to make millions on the forex markets? The answer is very simple. Forex is a very volatile market. Big dogs like financial institutions and hedge funds manipulate the forex market. We as little guys have no chance to be succesful in forex. The only way they make constant money is by getting people to sign up for their mentoring courses.

Why else would there be plenty of brokers offering you the oppertunity to open a $50 - $100 000 account if you could make millions sitting on a beach in the caribbean sipping on a marguerita and smoking a cigar while closing out winning trades?

I remember when i first started trading forex i called my brokers after some serious slippage took place. He then explained to me that i was trading an exotic currency that takes a while to get quoted etc...etc.... But i will never forget his last words...."Sir there is no easy money to be made in forex." After 3 years of trading i realise he was right. There is no easy money to be made in forex. Just easy money to be lost. Isn't that why 95% of all traders lose their accounts?

So what am i trying to say? Trade forex as a hobby. Open a $1 000 account and expect to lose it. Cause sooner or later you will loose it. Play around on the forex market. It keeps you busy and is fun. Almost as much fun as online poker....lol

And if you still don't believe me. Google Jesse Livingmore. He said:"Nobody can beat the markets over a long period of time. Sooner or later you will give back all the money the markets gave you."

Peace and happy trading. But dont take forex too serious....lol

[FXSaint]

Originally Posted by rdquintas

Once again, thanks for your LONG and DETAILED reply.
But still...

With parabolic sar, if you apply your SL on the dots indicated by the parabolic sar, as I mentioned above, 200 pip is the "normal" situation. Not 100 as you gave on your example.
I've seen other cases where you parabolic dot is, sometimes, 300... or even 500 pips!!!! distance

So I really think is quite dificult (not to say impossible) for you to apply your SL on the dots, while at the same time keep your risk =< 2%.

btw, when I talk about risk I'm thinking like this:
If I have a 2.000 USD account and I want to risk 2% of my capital, I will put my SL 40 pips (= 40 USD) away from my open price.
I believe I'm correct here, no ?

It seems that even with a 5.000 USD account you only have a buffer of 100 pips (again the 2% rule here) , not flexible enough if you want to put your SL on the parabolic dots.

I'm also a newbie...

The PSAR rules are a bit flexible, but unfortunately you may get stopped out of a few trades with a low SL. With that said, Trade what you are comfortable trading. If you start getting stopped out often, and notice the trend hadnt changed, this may not be the method for you. Dont let the method force you into more risk, if you are risk adverse, find (or develop) a method at fits your style.


Trading PSAR have wild ebs and flows, so the more margin and capital you have, the better.

Oh, I am a newbie too, so there are probably old timers who can chime in with better advice.

[daxm]

Chuck,

I'm really confused now. You show a system and state that it "consistently" makes 50-100 pips and yet your last post states that trading FOREX is consistently a losing deal. Which is it? Can you make money in FOREX or is it truly a zero sum game (actually a negative sum game given the spread).

I was actually about to try your V-Candle system but now I'm a bit shaken by your comments.

I will say that I agree with you that MOST people will lose money or else how could that occasional big winner get any money. I guess what I'm saying is that in any trade money is being exchanged from one person to another. HOWEVER, I would think that with a consistent trading system one should be able to be the profitable trader (over the long run) over the unprepared/emotional/non-plan-following trader. Maybe that is what you are trying to say?

Edit: If it is truly a game then why spend real money on it? Why not just open a demo account and trade just that?

[daxm]

Originally Posted by rdquintas

Once again, thanks for your LONG and DETAILED reply.
But still...

With parabolic sar, if you apply your SL on the dots indicated by the parabolic sar, as I mentioned above, 200 pip is the "normal" situation. Not 100 as you gave on your example.
I've seen other cases where you parabolic dot is, sometimes, 300... or even 500 pips!!!! distance

So I really think is quite dificult (not to say impossible) for you to apply your SL on the dots, while at the same time keep your risk =< 2%.

btw, when I talk about risk I'm thinking like this:
If I have a 2.000 USD account and I want to risk 2% of my capital, I will put my SL 40 pips (= 40 USD) away from my open price.
I believe I'm correct here, no ?

It seems that even with a 5.000 USD account you only have a buffer of 100 pips (again the 2% rule here) , not flexible enough if you want to put your SL on the parabolic dots.

I'm also a newbie...

I'd say you've got to wait for the right signal (taking money management into account too). Therefore the 200-500 pip PSAR Stop Loss signal opportunities are just not for you. Don't regret the trades that you can't/shouldn't take. Be diligent to your trading system and only select those trades that fit your entire trading system, not just the technical indicators.

[bman]

Originally Posted by bman

Hi:
I have been trying to undestand this PSAR thats all! system but since I have been unable to read all 190ish posts I would like to know in which post can I find the latest deviation of your first post (using only the PSAR on a daily chart)? I am not trying to sound sarcastic, I am just a bit confused on the rule change.
Also, the pip range on GBP/USD are huge, what currency pairs do you favor or recomend, specificaly for a new account?
Thanks in advance.

Folks, not to post like a complete idiot but could one of you veterans reply my last post?
Again, thank you in advance.

[mightysemiu]

Hi Everyone,

I was very sad to see my 500 bucks remaining 321l.

I went Short in EURUSD as the signal of the PSAR on the Daily chart and my stop loss was set to 1.4780 as the position of the PSAR. I was happy i set the lot size to 0.1 i.e 1 pip = 1 usd, I would have got a margin call now.

Any advice from you guys is welcome.

Hope to start on the right side tommorow.

[vxdxm]

Originally Posted by mightysemiu

Hi Everyone,

I was very sad to see my 500 bucks remaining 321l.

I went Short in EURUSD as the signal of the PSAR on the Daily chart and my stop loss was set to 1.4780 as the position of the PSAR. I was happy i set the lot size to 0.1 i.e 1 pip = 1 usd, I would have got a margin call now.

Any advice from you guys is welcome.

Hope to start on the right side tommorow.

Have to admit thats the one that f*cked me up also, today went long with gbp/jpy, and currently 130 pips up. but still a bit away from recovering my losses. That was a big loss to me and really got me down

[vxdxm]

Originally Posted by bman

Folks, not to post like a complete idiot but could one of you veterans reply my last post?
Again, thank you in advance.

I would suggest to read the first 10 pages. I use major pairs, dont trade exotic currencys as its very hard to find feedback on them.

[daxm]

Originally Posted by vxdxm

I would suggest to read the first 10 pages. I use major pairs, dont trade exotic currencys as its very hard to find feedback on them.

Tell me about it! Yesterday I was setting up trades JUST based on my technical indicators and I setup a trade on the AUD/THB. OUCH! Not only was my spread something like 100 pips but 1 pip cost something like $32.05. DOH! Good thing I'm learning on a demo account!