Parabolic SAR - that's all!

[pip huntter]

Dale,

u got it!! that is a very good thread i was sure u r going to come up with somthing that will turn every one's eyeballs into dollar sigine!!.

I like your ideas but i think it is too many indicators that will limit your trade and u will probably have like 2 or 3 trades every month.I don't mean that this is not a good work what u came up with no it is an exellent thing to have i will test all what u r saying and will check but again Decipline most of us doesnt have that!!!

Keep the good work and i think last week loss made u more wise!!!

Akram

[dpaterso]

Hello Akram,

Just have another look at my previous message - I have edited it with some 'important' edits.

Regards,

Dale.

[alan003]

Hi Dale

Thanks for more detailed information. It sure will help newbies like me. Keep up the good work. The past two weeks had been horrible for me. I want to wish you guys green pips and make some money.


Alan

[dpaterso]

Good evening (afternoon) all - Sunday night!

alan003:

Yes - I know what you mean - the last two weeks have really been lousy. I think the main reason for the quiet and range bound markets is because everyone is waiting for the Fed's decision on interest rates which is (finally) on Tuesday. I'm going to 'stick my neck out here' and go against the opinion of every single analyst and 'know it all' in the business BUT I have just gone through my 'Daily Parabolic SAR Checklist' and if Parabolic SAR is anything to go by it would not surprise me if the Fed DOES NOT cut interest rates but leaves them unchanged. Like I said before - on the daily charts anyway - it's almost 'uncanny' how Parabolic SAR is ALREADY moving in the 'right' direction BEFORE these major events and I can tell you that from my checklist the USD is starting to strengthen albeit very slowly against quite a few currencies which is contradictory to what will happen if the Fed cuts rates. Like I said - I may be making TOTAL fool of myself here BUT let's see just how good Parabolic SAR is. Also - like I said earliet - Gold is 'teetering' on the 'edge' at the moment - which COULD also be confirmation of the above i.e. if the Fed cuts interest rates then Gold should keep moving up BUT if they leave interest rates unchanged then the 'spectacular' drop in the Gold price which I have been waiting for for weeks now is going to happen in 'grand style')!!!

Anyway - following on from the above - depending on what happens on Tuesday (if the last two weeks are anything to go by I don't think anything exciting will be happening before Tuesday) - and based on our 'new rules' (RSI and Stochastics and MACD and ADX and ADXR - wow that's a lot of rules) - there are some 'majestic' reversals coming this week - AND - EVEN WITH OUR 'NEW RULES' IN PLACE - we should be able to find a couple of 'excellent' trades (which I must admit has surprised me because I thought that with all these 'new rules' in place we'd be lucky to do ONE trade for the rest of the year)!!! My 'Daily Parabolic SAR Watchlist' is getting longer and longer and longer!!!

Check it out (this is just the 'watchlist' so for those of you who are 'lurking in the shadows' and could not be bothered to actually read the WHOLE thread - YES - YOU THOUGHT I DIDN'T KNOW ABOUT YOU - don't go opening positions on the pairs listed below - it's only the 'watchlist'):

AUD/NZD*
EUR/CHF
EUR/GBP
EUR/NOK
EUR/NZD*
EUR/RON
EUR/SEK
EUR/USD
GBP/NOK
USD/BGN
USD/CAD*
USD/CHF
USD/DKK
USD/NOK
USD/SEK
USD/TRY
USD/ZAR*

* Beware - 'commdoll' - wait for Gold and Oil to 'decide'!!!

What I DO find 'interesting' is that by applying our 'new rules' it has kept me out of quite a few trades that I would have taken before 'no questions asked' and funny enough - one of them - is GBP/USD! Right now there is a Parabolic SAR signal to go short (I'm no longer going to refer to these signals as 'valid' UNLESS all of our 'new rules' are satisfied or our 'new criteria' have been met) BUT I have not taken it - let's see how our 'new rules' play out on this one!!!

Of course - the sad thing is - no 'valid' trades tonight (and I closed all of my 'pathetic' positions on Friday night) - and THIS is where the 'discipline' and the 'patience' is going to play a BIG part!!!

Anyway - let's hope we can ALL hit that big +100% mark by the end of the month.

One thing I am going to investigate further this week is the 'tampering' with Parabolic SAR's default settings. The reason for this 'change of heart' is because I have noticed that RSI and Stochastics react far quicker than Parabolic SAR - SO - I'm thinking - would it not be nice to have a Parabolic SAR that reacts just 'a tad' quicker - and works 'hand in glove' with RSI and Stochastics??? I have played around with the default settings before and the problem is that you have to find a balance between getting even MORE false signals from Parabolic SAR AND getting it to accelerate faster (thus saving you PIP's and getting an earlier entry or stop and reverse signal). I do believe that once you start changing the default settings then you have to start taking the actual 'behaviour' or 'characteristics' of each pair into account and this COULD become quite a 'mammoth' task BUT it's worth looking at again I think.

Anyway - here is to a good week (month)!!!

(Ingot54: as you will no doubt have gathered I'm feeling MUCH better today (tonight) - I spent most of the weekend watching my music DVD's - Nightwish, After Forever, Within Temptation, and, of course, Lacuna Coil!!! MAN - I CAN ALREADY TASTE THAT 'AUSSIE' BEER!!! By the way - I am ASSUMING that you get Captain Morgan over there???)

Regards,

Dale.

[dpaterso]

Here is another little 'startling' thing that I have noticed:

One of the reasons why Parabolic SAR MAY appear different at different brokers is because at some brokers you have a 'Sunday' candle while at others (the good ones) you DON'T have a 'Sunday' candle.

I've always known about this 'Sunday' candle but 'the penny never dropped' until this morning (as a matter of fact I feel like a total 'idiot' i.e. I have been 'a b'itchin' at Delta for the past couple of weeks because their daily chart takes an extra hour to 'tick over' and it now turns out that this is the reason why. If it 'ticked' over 'on time' as it were you would have a 'Sunday' candle and this 'Sunday' candle has the ability to totally 'throw off' any price based trading system that you may be following)!!! That's why at Delta (for example) Parabolic SAR always seems to be 'lagging' Parabolic SAR at the (my) other brokers BUT when it gives a signal theirs is 'more correct' (for want of a better explanation). In other words - at the (my) other brokers - I'm getting (have been getting) reversal signals too early. Make sense?

Now a 'Sunday' candle being ONLY one day extra might not sound like it could make a difference BUT on the daily charts for example it's NOT only one day extra i.e. you have and 'extra' 'useless' candlestick or bar every six days i.e. an extra Parabolic SAR dot is plotted so - in my mind - this 'error' is just compounded every week.

Now I'm not for one minute saying that this is the ONLY reason why Parabolic SAR may be plotted differently from one broker to the next but it could certainly be a contributing factor.

Just another little 'pearl of wisdom' for the week.

Regards,

Dale.

[Benjimang]

Originally Posted by dpaterso

Now I'm not for one minute saying that this is the ONLY reason why Parabolic SAR may be plotted differently from one broker to the next but it could certainly be a contributing factor.

Just another little 'pearl of wisdom' for the week.

Regards,

Dale.

Dale, how are you buddy? I think I can provide the answer to your querie regarding different looking charts. Firstly, check lower timeframes to see if THEY are the same on different brokers. I bet they are.

The reason 4 hour and daily charts seem to show up different on different brokers is due to different time zoning and different candle open/close hours. In the system I trade, I wait till a new candle to open to enter a trade. Problem is, my new candle opens at different times to many others trading my new system (on the daily and 4 hour). Some will step to a new candle at 5:00pm (end of equity market hours), some step at 00:00am, some open the new candle at 8 or 9am (open of equity market hours). This will also vary depending on what timezone the broker is basing these times on. On the 4 hour charts, different brokers may use different 4 hour blocks.

This will affect what every candle looks like. A big move at the end of my day might be showing at the start of yours, for example. Now, if my candles' open/close and high/low values are different to yours, our PSAR calculations MUST be different.

I believe this is why so many indicators, and indeed even the candles themselves, look so different on high timeframes across different brokers.

-Benjimang

[Hypechic]

Hiya Dale,
I can see that you're back on form this week. Took me a while but I was finally able to get the alligator to work on Delta. Thanks again.

[dpaterso]

Hey Benjimang, thanks for the input.

I have the same situation i.e. two of my brokers update their daily charts at 06h00 here in South Africa (which is 00h00 New York time) but that's not the issue that I had with Delta i.e. Delta's four hour charts update every four hours (obviously) with the start of the 'new day four hour chart' being at 11h00 hours here (which is 00h00 Bulgarian time) BUT their daily chart only gets updated at 01h00 Bulgarian time (which is 00h00 here). I was unhappy with this (until now) and asked them to change it so that the 'new' four hour charts AND the daily charts updated at the same time BUT I have only just realised that it is BETTER the way it is i.e. there is no 'Sunday' candle on their daily charts unlike at my other two brokers. While this MAY be the reason (one of the reasons that Delta's Parabolic SAR 'display' is different from the others) for the different Parabolic SAR 'displays' I don't think it's TOO serious (although remember that where you are getting a 'Sunday' candle that's an extra Parabolic SAR 'dot' which should really not be there i.e. it's based on only a few hours of an 'abnormal' trading day i.e. pretty much when you should not be trading anyway). On the other hand I use two of Mr Wilder's trading systems on the Indices and stocks etc. etc. and these are price based and I only realised today that on a Sunday/Monday I'm actually getting incorrect signals from these systems (although they still make profit 99% of the time believe it or not) i.e. they take into account the close yesterday and the day before and then generate a signal BUT the close of 'Sunday' is actually a 'misnomer' so what I will NOW resort to doing is 'combine' Sunday and Monday for these trading systems. You must remember that ALL of these indicators (including Parabolic SAR) were 'formulated' on the basis that you have an actual market close and a couple of hours later the market opens again i.e. the next day (unlike what we have with forex where it is 24/7 really). In other words - Parabolic SAR should NOT give you more than five 'dots' per week BUT if you're getting a 'Sunday' candle 'no matter which way you slice it' you are getting 'closer' to the reversal point than you should be at the end / beginning of any given week. I'm not sure if that all makes sense (well it does to me but I could have this wrong - not sure).

Hypechic: yup - back on form. Sorry you had 'hassles' installing that (although I did my best to make it as 'streamlined' as possible). Just remember that the 'true' Alligator has the lines or MA's offset a different number of bars 'into the future' as it were so this is not a 'true' Alligator BUT it does use the same MA's and seem to react the same way (possibly even quicker than the 'original' as a matter of fact) AND we're not 'Alligator' trading here anyway i.e. it's only to detect or confirm the presence of a trend and it seems to work fine for this purpose.

Later.

Regards,

Dale.

[Hypechic]

Yes Dale, I know our Alligator is not the true one but like you said it does serve the purpose of trend confirmation.

[pip huntter]

ok guys i guess it is monday again!!! moving is not that much today so Dale what is up? i know u closed all the postions last week so any new postions u opened or u just watching your wishlist??


Akram