Parabolic SAR - that's all!

[Hypechic]

Originally Posted by dpaterso

Thanks for taking the time to reply.

Well - I don't know if it's going to make you feel any better but I attached a chart of GBP/USD with Fibonacci Levels plotted (and of course Parabolic SAR).

Now - when I'm REALLY desperate - I give the 'good 'ol fibo levels' a bash - and - from what I can see - hopefully for you - resistance is going to be 2.0195 or thereabouts.

Don't feel too bad - I'm in a 'hedge' on this pair at this broker - waiting 'PATIENTLY' for it to break out of my 'hedge' either way!!!

Regards,

Dale.

Thanks Dale.

[dpaterso]

Hello ottober8,

Thanks for coming back to everyone and posting your results.

Yes - I do have a comment:

'HOW COME YOU'RE MAKING MONEY AND I ONLY HAVE ONE MISERABLE OPEN POSITION THAT MAKING A LOSS RIGHT NOW!!!!!!

Seriously - well done.

Look - you know - again - it does just go to prove that even 'pure' Parabolic SAR DOES WORK BUT ONLY IF YOU FOLLOW THE TRADES THROUGH!!!

Funny enough I've actually noticed that EVEN since I took that 'windfall' of mine last month - some of THOSE trades have not yet even reached Parabolic SAR 'maturity' as yet and are sitting in HUGE profits at the moment.

Aside from anything else it would appear that once you get into a Parabolic SAR 'cycle' as it were and follow the trades through to 'maturity' AND don't break the 'cycle' and just keep going - I reckon that over a period of a year or two you'd be REALLY 'in the money' which is fine as long as you don't have to withdraw any funds along the way - remember - 'Tradevesting'!!!

Anyway - well done. I feel bad for you because it's not real money - but - at least doing it this way - if it works on a demo - then you can be sure that it will work EXACTLY the same on a live account - which does NOT apply if you are trying to 'get rich quick', 'make a quick buck', and / or 'scalp' the markets. Those things ALWAYS work on a demo account and NEVER work on a live account. Trust me on this - I have the bank accounts to prove it!!!

Regards,

Dale.

[ottober8]

Dale, you are right,
Also I beleave that a deme and a real account ar REAL different!
In any case the first step, in my opinion, tio test a strtegy is to start on a demo; in this case particularly because you have to system process, as we know the method is foundamental.
At the end of next week I will start to trade your system on real account (mini account with 0,1 lot for starting) in parallel I' ll continue the demo too.

I follow every day this thrread and I appreciate all your brainstormnig regardin this TS and trading in generally

Bye

[dpaterso]

It's only my pleasure (I see you are from Italy by the way - ever been to see Lacuna Coil live)???

I have ALWAYS believed that a demo account and a live account are two totally different 'animals' BUT having said that - because this 'system' is a 'long term system' it does not matter whether it is run on a demo or a live system - the results should be EXACTLY the same - which - like I said before - cannot be guaranteed on 'short term get rich quick scalping systems' - these systems - I believe (know) - will 'fry you' on a live account.

Here is (possibly) another 'breakthrough':

I had another look at why 'Just Joan's' (and my) GBP/USD positions have gone sour - you know - trying to get 'Analysis - Paralysis' again!!!

First of all - EVEN IF you had followed ALL the 'new rules' - you WOULD have taken this trade (see first chart attached). MACD had crossed, Stochastics were high and had JUST turned down. Admittedly RSI WAS below 50 (only just though) and ADX was JUST below 20 - but - if the truth be told - I would still have taken this trade.

The worst part about this particular trade (if you were following 'pure' Parabolic SAR) is that it immediately turned to a nice profit and then - after waiting for a few days - came right back to where it started - at best case breaking even if you were stopped out by Parabolic SAR.

NOW:

Have a look at the second chart. Here - the only difference is that I used Fast Stochastics (instead of Slow Stochastics as per our 'new rules' although I must admit I don't think I explicitly stated this).

Now the picture is 'slightly' different i.e. look were Fast Stochastics was at the time of the Parabolic SAR signal. Totally different picture. Go back a couple of days on that same chart and see what happened when the first Parabolic SAR signals were given AND Slow Stochastics were high!!!

Take a look and give some feedback!!!

Sorry 'Just Joan' - as I type I see GBP 'rocketing' through the fibo lines - so much for fibo lines!!!

Edit:

OK - well - I just 'applied' the same logic to my EUR/CHF position - and - in this case - no matter whether it was Slow Stochastics OR Fast Stochastics that I used - BOTH were high. The only thing wrong with THIS trade was that MACD had not crossed (and still hasn't). What 'seems' to be becoming very apparent here: either you use 'pure' Parabolic SAR with as many pairs as is humanly possible to trade OR you use our 'new rules' and 'gazillion' indicators AND EVERY SINGLE ONE OF THE RULES MUST BE SATISFIED i.e. don't 'overlook' or 'justify overlooking' a SINGLE ONE.

Edit:

I just attached the chart for EUR/CHF detailing the above.

(It's disgusting you know - after being in the computer business for most of my life - I've only JUST discovered how to change colors and pen styles in PC Paintbrush - which I'm sure you've all figured out that I have by now!!!)

Edit - Edit - Edit:

Hey - look at Gold - look at Gold!!! Could this be it!!!

Regards,

Dale.

[ottober8]

Dale,

I don't know Lacuna Coil , sorry.

I will folloe the system with pure PSAR with all pairs my broker has and, as you told, it will be hard to follow new rules in this case, but many crosses will make positive the result (I hope!)

Colud be interesting to apply new rules to a new TS following just one o two pairs or, better , make ad EA for automatic trading.

Regarding gold I never trade it, as I understand you are used to do.
You can start a new thread regarding gold!
MG (swiss forex broker) is offering also gold & silver toghrether all crosses and working on MT4 platform.

In any case any suggestion regarding gold arre WELCOME!!!!!

By
Claudio

[dpaterso]

Hey Claudio (that's better - no secrets here)!!!

Listen - if I had $100 for every time I've been WRONG about Gold - I'd be a rich man by now!!!

Put it this way - even for those interested in trading Gold and Oil - no need for another thread i.e. the same 'rules' or 'indicators' would STILL apply - as a matter of fact EVEN MORE SO - because - remember - that when all of these indicators were developed they were DESIGNED around stocks, metals, and commodites NOT forex pairs i.e. when Stochastics says that something is oversold - you can be sure that IT IS oversold - not just a 'guesstimation' or 'approximation'. That's why all of these indicators work so well on the Dow, S&P, Nasdaq, etc. etc. etc.

The only 'problem' with Gold and Silver and Oil - you need margin (capital) because the leverage is normally not as high as on forex pairs as provided by the brokers - AND - if you're wrong - man - it does not take a big movement to 'catch you with your pants down'!!!

Anyway - the point is - Parabolic SAR will work EXCELLENTLY with Gold - AND with our 'gazillion' new indicators - ALL OF WHICH I MIGHT ADD (well all except Parabolic SAR and MACD but just hang in there I reckon - ARE YOU LISTENING DALE - HANG IN THERE) are giving us a signal that Gold is NOT going to go STRAIGHT to $800 yet but will probably correct before getting there - same with Oil I believe.

OH - and - apparantely this 'sudden drop' in the Gold and Oil prices is only due to what they refer to as 'quadruple witching' which happens at the end each month - it's got something to do with the expiry of the current (or last) months contracts and the renewal of these contracts (still don't quite understand it well). If anybody can explain this is 'laymans terms' then please feel free to post!!!

Edit:

Sorry - 'quadruple witching' only happens four times a year - just heard it on Bloomberg - I just wish they'd EXPLAIN what it means!!! Oh - it is the 'expiration' of 'stock and options futures contracts' - I'm assuming that this is like where Oil futures contracts close for the previous month and then the new 'contract' comes into force / play. I think I'm going to 'bug' John Foreman' ('rhodytrader') to explain this to us.

Regards,

Dale.

[dpaterso]

By the way 'Just Joan',

I see that GBP/USD has 'stalled' just above the one fibo line. This trade is a 'pain in the you-know-where'!!!

I was thinking about something though - how come you're making a loss on this position?

Actually - never mind - I think I've just answered my own question - I think you're using Delta are you not???

If so - then that's why.

I've got to tell you that I'm starting to worry about Delta's Parabolic SAR.

I mean - have a look at the charts that I posted for you earlier. On THOSE charts you should be either breaking even OR maybe a very small loss i.e. not much more than the spread. However - I've just had a look at GBP/USD on Delta's charts - and I can see where the loss in coming from.

Here we go again!!!

I'm going to follow this trade through for sure to see what the final outcome is going to be. On my GCI chart (the blue charts) I have just got a Parabolic SAR signal to reverse this position and go long BUT on Delta's chart I should still be short (same with you I think). Now the 'trillion dollar' question is: at GCI you would about have broken even at this point. At Delta you're now in a 'bad' loss. BUT - would you have made more money opening this position based on Parabolic SAR at GCI and then reversing when 'prompted' to do so by GCI's Parabolic SAR OR would you have made more money by taking Delta's signal - even although it's in a loss at the moment - and seeing the trade through based on Delta's signals???

On this particular pair GCI (and MT4) has signalled at least one additional reversal before getting to this stage whereas Delta has not given any reversal signals in the interim.

One thing I can tell you - is that GCI is the one (and MT4) where the (my) manual calculation of Parabolic SAR is 'spot on' and agrees with the 'plotting of the dots' and values and Delta (horror of horrors) is where the 'errors' come in BUT having said that Delta's 'SAR' seems to keep you in the trade / trend - with no (or fewer) 'whipsaws'!!!

Maybe THAT'S an easy solution to all of this i.e. open positions on MT4 entry signals but use Delta to track the positions to maturity. HERE WE GO AGAIN!!!

You know what - me thinks - maybe - I should go out and have some prawns and RUM - there is 'f-all' happening for me here - and I'm sure not going to pay the bills tonight!!!

Regards,

Dale.

[droesparky]

Geeze Dale if you had a $100 for every time youve been wrong about Gold you could bring us all to Affrica to visit.

[dpaterso]

Now THAT'S a FACT!!!

Actually - I've just had a 'lightbulb' moment - and an idea for a REAL trading system:

Basically it works like this:

Every day you all post a question for me like:

What will happen to EUR/CHF today?

Then - whatever my reply to the post is e.g. BUY EUR/CHF - you do the opposite and SELL EUR/CHF!!! 100% GUARANTEED PIPS!!!

Only thing is then you'll all have to pay me commission because for me to trade my own signals would be 'insider trading' and then it probably would not work!!!

Regards,

Dale.

[dpaterso]

By the way - I have contacted Mr Wilder (or at least - someone from his organisation) and asked them if they could possibly give me (us) some input as to WHY Parabolic SAR is (could be) different at the different brokers and on the different trading platforms or charting tools - you know - just some ideas or what to look for.

For interest sake - I have just gone over my manual calculation of Parabolic SAR AGAIN BUT using Delta's CLOSING PRICES instead of HIGHEST HIGH PRICES and the 'errors' get substantially smaller - not exact - but the differences change from let's say an 11 PIP 'error' to maybe a 1 or 2 PIP 'error' - which could quite possibly be due to 'rounding'. In other words - Delta's 'SAR' - MAY be being calculated on the HIGHEST CLOSING PRICES instead of the HIGHEST HIGH PRICES and that's (maybe) why theirs is different. Still not exact - but closer!!! Not sure how this impacts on us or if it 'makes my day' - BUT - AT LEAST - there is one POSSIBLE explanation. I have that kind of mind - as long as there is an 'explanation' for something - I can live with it - it's the 'not knowing' that could put me in a 'straight jacket'!!!

Regards,

Dale.