Parabolic SAR - that's all!

[droesparky]

So this would be the current trend for cable. Its steep so it looks to me like one sideways day and it would break the trendline.

[dpaterso]

This is off topic - but I just thought I'd share it with you (I may delete it later though):

My seven year old son came over to me today and, for the first time, wanted to know 'how to do this business'? He sees me sitting in front of three different workstations and six monitors all day everyday (and most of the night) - and basically wanted to know how 'this business' (trading) works.

I gave him the following description:

(I drink about three or four Red Bull's a day - absolutely love the stuff).

I took a Red Bull tin off my desk and I said to him that let's say he paid me R10.00 ZAR for the tin. Then next week the manufacturers of Red Bull decide to put the price up to let's say R20.00 ZAR (it's actually not that far off here in SA I can tell you). Because they have put the price up that means that he could now sell this same tin of Red Bull to somebody else next week for R20.00 ZAR and he's then made a profit of R10.00 ZAR. That's great he says. Then I had to explain to him that when he sees me swearing at my screens that this is when I'm losing money because you can lose money as well I explained. In other words (I told him) let's say that you paid me R10.00 today for this same tin of Red Bull and next week the manufacturers of Red Bull decide to drop the price because they have made too much Red Bull and have too many tins in the factory that they can't sell so they drop the price to R5.00 ZAR. Now this same tin of Red Bull that you paid R10.00 ZAR for today is only worth R5.00 ZAR next week so if you decide to sell it you have now lost R5.00 ZAR.

This he took in his stride but his comment was 'Oh - so that's how you (meaning me) make the red and blue lines go up and down'! He thinks it's me that makes the bars move! Can you imagine that? Man - he's got a great future ahead of him I can tell you (as a trader). I will, however, put him on the right track and ensure that he opens an online brokerage though!!!

Regards,

Dale.

[dpaterso]

Hey droesparky:

I'm REALLY starting to like those trend lines man. I assume that if you can't draw a trend line then there is not trend and should not be using Parabolic SAR?

The (my) problem of course is that I have tried this on one or two occasions and ALSO found it to be subjective. Is there a right way or a wrong way to draw them? I mean - if you look at your GBP/CAD chart (this is one of the pairs by the way that is p*****g me off because it does not seem to be going anywhere and I've had it for almost a week now and it's never showed a profit) - if you made your trend lines wide enough you would be able to draw trend lines that indicated that the pair was currently in an up trend and has been for a while - which it's not - it seems to be range bound (well almost). Do you see what I'm trying to say? The down trend was beautiful - I could find that - but I would also have been able to draw trendlines to show that the pair is currently in an uptrend as well which we know to be incorrect.

By the way - see - I told you - today is Thursday - and the Dow is going up!!! (Only kidding but it had better keep going so that I can have a stress free weekend)!!!

Regards,

Dale.

[jacioux]

Originally Posted by dpaterso

This is off topic - but I just thought I'd share it with you (I may delete it later though):

My seven year old son came over to me today and, for the first time, wanted to know 'how to do this business'? He sees me sitting in front of three different workstations and six monitors all day everyday (and most of the night) - and basically wanted to know how 'this business' (trading) works.

I gave him the following description:

(I drink about three or four Red Bull's a day - absolutely love the stuff).

I took a Red Bull tin off my desk and I said to him that let's say he paid me R10.00 ZAR for the tin. Then next week the manufacturers of Red Bull decide to put the price up to let's say R20.00 ZAR (it's actually not that far off here in SA I can tell you). Because they have put the price up that means that he could now sell this same tin of Red Bull to somebody else next week for R20.00 ZAR and he's then made a profit of R10.00 ZAR. That's great he says. Then I had to explain to him that when he sees me swearing at my screens that this is when I'm losing money because you can lose money as well I explained. In other words (I told him) let's say that you paid me R10.00 today for this same tin of Red Bull and next week the manufacturers of Red Bull decide to drop the price because they have made too much Red Bull and have too many tins in the factory that they can't sell so they drop the price to R5.00 ZAR. Now this same tin of Red Bull that you paid R10.00 ZAR for today is only worth R5.00 ZAR next week so if you decide to sell it you have now lost R5.00 ZAR.

This he took in his stride but his comment was 'Oh - so that's how you (meaning me) make the red and blue lines go up and down'! He thinks it's me that makes the bars move! Can you imagine that? Man - he's got a great future ahead of him I can tell you (as a trader). I will, however, put him on the right track and ensure that he opens an online brokerage though!!!

Regards,

Dale.

Dont you just love kids comments, everything is so simple to them my daughter tells me to "hurry up and make money so we can go to the park", and of course she waves her magic wand and i am a millionaire just like that.

[droesparky]

Dale it looks like it has been in a small uptrend. It did not recover as much as other gbp pairs today.

on this fib channel you can ignore the upper line the bottom one is what is importand to you in this case, in a down trend it would be the upper line.

I just like channels.

I guess just connect the candles one day at a time. as long as your in profit.

[jguy3348]

[quote=droesparky;19994]Hey Dale it looks like they all bugged out on you today.

Not only do you need exit rules, you also need some kind of re entry rules for when you get shook out of a trade early, It will always happen so there always needs to be a rule for it. either that or no entry until next signal.

[quote]

I haven't tested it but set up a Stoch Slow 8 3 3.. look at when the Stoch crosses for the exit!


generalz

[ottober8]

Dpaterso

Let me say following:

Your system is possible will be profitable continuosly, but the problem could be money management and riscK/reward ratio.
As you wll know forex is open 5 days for week, every week.
Drawdown is a big suffer, but in medium-long term trading are unavoidable.
I fell a good tuning of lots, using minilots and/or microlots as some broker offer, colud be a good chanche to test in the time this system to improve it and then start slowly to improve money in trading.
One other thing, I do not beleave in back test of MT4, and also working in demo accont is not telling you the thrue, could be helpfull just for beginning, the first step.
I apreciate your honesty in descibing your feeling, I think many many people reading your post reconise their sentiment...
Go haead, we will work on and as far I can and I know I'll try to partecipate.

Bye

PS I am not English mother language, I hope you understand my writing.

[dpaterso]

Good afternoon (morning) everyone!

Sorry I have not posted since yesterday - I decided to move my 'drinking night' up one day - so I'm feeling real bad today - but not bad enough to stay away from business!!!

Anyway - just some thoughts:

I know I've been banging on about the daily charts but I've had a good look at the four hour charts as well and it's pretty obvious on the four hour charts that your Parabolic SAR entry points are far 'closer' to the Parabolic SAR dots than on the daily charts so your drawdown if the trade goes against you is a lot less and there are more trades but, of course, less profit per trade. Not sure what to make of this. The only thing that I am sure of is that in order to avoid 'whipsaws' or the 'Parabolic whoops' (somebody else coined the phrase not me) on the four hour charts I would not use stops.

Again I find myself being of the opinion that the 'commdolls' should be left out of my 'pairs basket'.

I also think that if you are going to trade as many pairs as possible (which definitely works for me) then I'm thinking that maybe your lot size should be varied so that each pair / position carries the same 'weight' as it were. Does that make sense? I don't know how to do this though so if anyone has a suggestion or know how to 'weight' each pair then please let me know. As an example: a 1 PIP movement on GBP/ZAR does not carry the same weight as a 1 PIP movement of EUR/USD. Is this a valid argument or do you think that it does not really matter? GBP/ZAR is a bad example actually for the simple reason that it is also a 'commdoll' but I think you get what I'm saying.

At this time I'm also undecided as to whether or not I should close all of my open positions and take the profit that's showing. If I do that then, by my calculations, my capital gain for the month is approximately 110% (as I type this message). On a scale of one to ten what rating would you give 110%? How is everyone else doing? The main reason I want to close all of the positions is simply because it's the last day of the month and I'd like to start afresh on Sunday - no other reason - Parabolic SAR is not telling me to close anything - but - well - any thoughts?

Regards,

Dale.

[dpaterso]

OK - done!!!

Capital gain for the month of August (forex only): 114.84%!!!

That's good enough for me.

Thanks to everyone that has posted on this thread, J. Welles Wilder Jnr., Parabolic SAR, and (of course), ME!!!

I really and truly hope that all of you have so far had the same or better success using Parabolic SAR (if you like maybe you can post your results as I did above).

Let's see how we all do next month.

By the way - another thought - as far as excluding the 'commdolls' is concerned:

I don't see why you can't use Parabolic SAR on Gold and Oil and then that should give you the heads up as to whether or not Parabolic SAR is giving the correct signals for the 'commdolls'. The reason why I would not really like to exclude them is because, for the most part, they are extremely high yield pairs i.e. there is nothing quite like the profits (or of course losses) that you can make on GBP/ZAR, EUR/ZAR, and USD/ZAR (in that order).

Anyway - thoughts from anyone?

Thanks again.

Regards,

Dale.

[ottober8]

Dpaterso
well done!
I think now withe the incoming news (Bernanke speaking) your position would be wrost...
To take gain in my opinion is never a bad action. As I say forex is 24h open 5 days a week and to start again monday with a good gain in your basket is better to have a floating loss that "could" be a gain in the future.
The experimentation go on and in the future we understand how to maximize gain, but we will continue if we have a loss? I do not know.
I think is necessary to work on the balance of portfolio as you say. I think is possible to have all cross refered to USD (medium during the week) and then make balance. We will work on.
Regards and have a good week end

PS I submit a report regarding a demo account started few days ago.
3000 USD capital
mini account 0,01 minilots each position
To image a bigger trading is sufficient to moltiply for 10 or 100...
I go in "AT the market" not in reverse of PSAR, just for beginning then I will follow the rules.
Total floating went negative only at the beginning and few minutes after the "speaking" of roday.
This test will be interesting from at least one week; if you cold be interesting I will post again pdf in the nest days