Parabolic SAR - that's all!

[dpaterso]

Good (Saturday) Morning,

Hello Akram,

As far as my 'findings' are concerned with Parabolic SAR at Delta:

Don't get me wrong - I'm NOT saying that you should change how Parabolic SAR is calculated or plotted IF IT IS CALCULATED CORRECTLY (even IF this was an option to you). What I am saying is that I think that Delta's calculations ARE WRONG i.e. according to 'the book' when Parabolic SAR is calculated it is only the HIGHEST HIGH PRICES that are (supposed to be) taken into account and from what I can see Delta's 'SAR' is calculated using the HIGHEST CLOSING PRICES for THEIR 'SAR'. Now the fact is that there obviously is some merit in doing it this way (whether it be a mistake or not) i.e. there are (like I said previously) far less 'whipsaws' and Delta's calculation of SAR keeps you going with, and in, the trend longer HOWEVER it would 'appear' that because of this 'possible mistake' you are getting entry signals too early and stop and reverse signals too late. That's why I need some input from 'the man himself'.

As far as asking your broker about this is concerned - I would not waste my time. Delta is THE ONLY broker that I know of where your queries make it past customer service to the IT department (I know this because they have already (in the current version of the trading platform) added one or two of MY suggestions to the software, and will be adding one or two more of MY suggestions to the new version). For the most part - at 'other' brokers - you are pretty much talking to the 'broker equivalent' of a 'call centre agent' and are more likely to get the question 'Parabolic WHAT?' from customer service than 'Oh yes - of course - our Parabolic SAR uses the highest high price while in a long trade to calculate Parabolic SAR - is there anything else I can do for you?'!!!

As far as your 500 'green' PIP's and your 250 'red' PIP's are concerned - yes - that IS HUGE and well done. I probably DID have all those positions open until two weeks ago and would probably be sitting in the same place you are right now. HOWEVER - the object of the (our) 'excercise' is to 'eliminate' those 'red' PIP's 'from the get go'. Would it not be FAR better to ONLY have the 'green' PIP's right now??? The kind of trades I'm hoping we are going to get from now on are the 'text book' trades where NOTHING can go wrong (I have attached a chart to demonstrate what I reckon is going to be a 'text book' trade next week maybe even as soon as Monday and THESE are the kind of trades that I'm hoping we will start taking ALL THE TIME from now on). In other words - the object of the excercise NOW is to end up with (at any given time) for example - out of 44 positions / pairs - hopefully 42 of them showing a profit and maybe only 2 of them showing a loss (and these 2 only there because you 'broke a rule') - as opposed to 22 of them showing a profit and 22 of them showing a loss and hoping that the 'nett' is a profit. Remember (I have proved this already I think): your 'nett' could just as easily be a 'nett loss' as a 'nett profit' depending on which pairs you are trading at any given time. Like I also said before - unless there is a way of 'weighting' the pairs against each other - you could land up in the 'sh1t'!!! In other words - let's assume that your lot size is 100000: 100000 units of GBP/ZAR is a whole lot different position than 100000 units of EUR/USD and if, let's say, GBP/ZAR is showing a loss then EUR/USD has to be showing a 'disproportionate' profit to cover the loss on GBP/ZAR. So - I figure - we either have to 'weight' the pairs against each other (by varying the lot sizes) OR we ONLY take 'text book' trades!!! This would ALSO have the added benefit of reducing the amount of margin or capital needed for the simple reason that you don't have to 'carry' or 'cover' a 'sh1tpile' of losing positions.

Again - as far as the attached chart is concerned - imagine that every single trade that you took started out like this one (possibly could) and after waiting for this type of setup on each and every single pair (44 pairs) and ALL of those positions sitting in a profit at any given time!!! Now THAT'S trading!!! Look how many days I've waited for this (count the 'dots')!!!

Let me put it this way: if trades like THIS turn 'sour' then I might as well make a nice big poster listing all the pairs in two columns - one column to 'buy' the pair and one column to 'sell' the pair. The procedure then would be to place such poster on a dartboard once a day, blindfold myself, spin around three times, and throw a dart at the poster and, depending on where the dart lands, either buy or sell that pair. If I miss completely then that would be a signal to stay out of the market for that day!!! What do you think???

Actually - now that I think about it - I'm sure that I read somewhere - that it's possible to trade like that i.e. I read somewhere that because of 'our connection to the universe' and 'fractals' and 'stuff' like that that it is quite feasible to just walk up to your computer and take a 'random' trade i.e. no charts no nothing and then just keep repeating the process every day. Apparantley it can be (was) quite successful if I remember correctly!!! Chances are good though that this person was ALREADY a multi-million dollar millionaire and had nothing better to do with themselves!!!

Anyway - PATIENCE is STILL THE KEY - EVEN MORE SO NOW - DO YOU GET THAT DALE!!!

Regards,

Dale.

[Bocajunior]

Morning all,

So many pages of posts that I have to cacth up with and read through.

Just a quick update of the positions I am holding. I have 8 still open that were taken over a week ago now using parabolic SAR alone. Every one of these is sitting in healthy profit. The GBP/USD position I closed manually after the dollar rallied after the Fed cut.

What I did on about 4 of these positions after they broke the 200 pip profit barrier, I took 1/3 of the profits of the table and let the rest run. I know this is not in system in anyway, but I felt I should bank some profits.

Will be interesting to see how we progress in the week ahead.

I dont know about you guys, but I have not seen a valid entry for a few days now. Patience is very much the key with this system.

Cheers all
Scott

Originally Posted by Bocajunior

Over the last week I took the following pairs based on the Pure Parabolic SAR alone and although I was showing profit early on, they are totalling a slight loss now. But I am going to ride them all out and see how it goes:-

AUD/NZD - short
AUD/JPY - long
EUR/JPY - long
EUR/AUD - short
EUR/CHF - long
GBP/USD - short (closed for a 45 pip loss. )
NZD/USD - long
USD/CAD - short
XAG/USD - long


Thanks.

[dpaterso]

Well done Scott.

I'm not sure that I would worry too much about 'messing' with the exit strategy. If I'm not mistaken it was Ingot54 that said something like 'your profits are in your exit strategy' or something like that.

Again though - with Parabolic SAR - once you have 'broken' the cycle early - you could wait a LONG time to get back in again. That's the problem.

But - well done anyway!!!

Regards,

Dale.

[dpaterso]

Actually - it just occurred to me - that the title of this thread could no longer be further from the truth - even if I tried!!!

Here is a quote from my 'opening' post on this thread:

Why is it that we all feel the need to 'mess' with the indicators and try and find that 'edge' when there are already tried and tested and proven methods of making money!

ROFLOLTSOOE (pronounced - 'rof - lol - tsuey')!!! It's a new one: 'Roll On Floor Laughing Out Loud Tears Streaming Out Of Eyes'!!!

OH MAN!!!

Regards,

Dale.

[Bocajunior]

Thanks Dale,

You are right that If we exit early it may take some time before there is an opportunity to get back in the market again and this may not satisfy our addiction to be trading.

But patience and discipling are needed here I think. Let's see how it goes, we are still developing the sysyetm after all and I think it's going very well up til now.

I got to go back and read the last twenty pages of the thread to refresh my memory.

Talk soon.
Cheers

[dpaterso]

Good (Saturday) evening folks,

I just found this article on the Internet and found it interesting (see attached Adobe PDF file).

It is an interview with 'THE MAN' (Mr J. Welles Wilder Jnr.) from 'The Traders Journal'.

Read it carefully i.e. 'read between the lines' - there is a lot of information and good advice here.

Just thought it may give you more confidence in 'THE INDICATOR' (Parabolic SAR) i.e. KNOWING that it was not 'just slapped together' by some 'yahoo' that had nothing better to do with his time than to draw some 'random dots' on a sheet of graph paper!!!

Regards,

Dale.

[pip huntter]

Originally Posted by dpaterso

Good (Saturday) evening folks,

I just found this article on the Internet and found it interesting (see attached Adobe PDF file).

It is an interview with 'THE MAN' (Mr J. Welles Wilder Jnr.) from 'The Traders Journal'.

Read it carefully i.e. 'read between the lines' - there is a lot of information and good advice here.

Just thought it may give you more confidence in 'THE INDICATOR' (Parabolic SAR) i.e. KNOWING that it was not 'just slapped together' by some 'yahoo' that had nothing better to do with his time than to draw some 'random dots' on a sheet of graph paper!!!

Regards,

Dale.

Well Dale,

u love this guy big time!! well after i read this intrview i think he is one of the best traders on the earth!!.

But Dale how can we get both systems he is talking about??? and he is saying he makes 50k a year on the delta system is this all what the system can be done?? or he means it makes 50k if he use just 1 lot??? I don't understand this point!!

Thanks for posting this i think it is very nice to be known


Regards,

Akram

[pip huntter]

Dale,

did u get any reply for the PSAR?


Akram

[dpaterso]

Hello,

I'm not sure which systems you are talking about (he mentions some new ones and some of the 'original' ones - like his 'Volatility System' - and these are in my (his) book i.e. 'New Concepts In Technical Trading Systems'). I (currently) use three of the systems that he mentions: 'The Volatility System', 'The Trend Balance Point System', and 'The Reaction Trend System' on the Indices, Gold, Oil, and Silver (oh and on Soybeans of course). Of the three 'The Volatility System' does THE LEAST trades (I have not even had one yet) BUT I track it daily and I can tell you that when I do eventually get a signal and enter it's going to pay off BUT BIG TIME. 'The Reaction Trend System' gives a lot of action and makes consistent profits. The 'problem' with all of these systems is that you really have to understand and study them and you cannot trade too many instruments with them at a time for the pure and simple reason that it takes time to maintain them on a daily basis e.g. you could not use them (well maybe you could use 'The Volatility System') to trade 44 pairs daily UNLESS you had a live data feed and software to do the calculations for you (I manually key in the open, high, low, and close prices into a spreadsheet for each instrument that I trade with them and this is time consuming). That's why I was hoping that more people would 'spring' for his book 'New Concepts In Technical Trading Systems'. The idea was to sort of 'spread the load' on a daily basis among ourselves e.g. I would do the calcuation of the entry, exit, take profit, and stop loss values for say 10 pairs, somebody else could do it for another 10 pairs, somebody else another 10 (you get the picture) and then we could 'pool' our information daily thus making it quicker and easier to maintain the systems on a daily basis but nobody seems interested for some or the other reason even AFTER they offered everybody here a discount. Anyway - as far as profit from these systems goes - they are constantly profitable - but I'm still getting 'comfortable' with them so I'm only trading with small amounts at this point i.e. I still have to refer to the book every time I want to do something BUT when these systems become sort of 'second nature' to me then I'll start 'ploughing in' the 'BIG' money and opening the 'FAT' positions!!!

And no - I have not had an answer yet - but I know I'll get one - soon.

And - back to business: just gone through my 'wishlist' and STILL no 'text book' entries - they're all still 'coming'!!! This week LOOKS promising though i.e. the 'wishlist' is getting longer and longer as the days goes by!!!

Regards,

Dale.

[pip huntter]

Originally Posted by dpaterso

Hello,

I'm not sure which systems you are talking about (he mentions some new ones and some of the 'original' ones - like his 'Volatility System' - and these are in my (his) book i.e. 'New Concepts In Technical Trading Systems'). I (currently) use three of the systems that he mentions: 'The Volatility System', 'The Trend Balance Point System', and 'The Reaction Trend System' on the Indices, Gold, Oil, and Silver (oh and on Soybeans of course). Of the three 'The Volatility System' does THE LEAST trades (I have not even had one yet) BUT I track it daily and I can tell you that when I do eventually get a signal and enter it's going to pay off BUT BIG TIME. 'The Reaction Trend System' gives a lot of action and makes consistent profits. The 'problem' with all of these systems is that you really have to understand and study them and you cannot trade too many instruments with them at a time for the pure and simple reason that it takes time to maintain them on a daily basis e.g. you could not use them (well maybe you could use 'The Volatility System') to trade 44 pairs daily UNLESS you had a live data feed and software to do the calculations for you (I manually key in the open, high, low, and close prices into a spreadsheet for each instrument that I trade with them and this is time consuming). That's why I was hoping that more people would 'spring' for his book 'New Concepts In Technical Trading Systems'. The idea was to sort of 'spread the load' on a daily basis among ourselves e.g. I would do the calcuation of the entry, exit, take profit, and stop loss values for say 10 pairs, somebody else could do it for another 10 pairs, somebody else another 10 (you get the picture) and then we could 'pool' our information daily thus making it quicker and easier to maintain the systems on a daily basis but nobody seems interested for some or the other reason even AFTER they offered everybody here a discount. Anyway - as far as profit from these systems goes - they are constantly profitable - but I'm still getting 'comfortable' with them so I'm only trading with small amounts at this point i.e. I still have to refer to the book every time I want to do something BUT when these systems become sort of 'second nature' to me then I'll start 'ploughing in' the 'BIG' money and opening the 'FAT' positions!!!

And no - I have not had an answer yet - but I know I'll get one - soon.

And - back to business: just gone through my 'wishlist' and STILL no 'text book' entries - they're all still 'coming'!!! This week LOOKS promising though i.e. the 'wishlist' is getting longer and longer as the days goes by!!!

Regards,

Dale.

Dale,

I think i have to buy the book coz i need to understand every thing from the begining i think there are lots of people are intrested to get the same book and we may try another thread to those who trade with these new system.But i can feel it is very very hard to trade with as it takes from u long time to have a vailed entry through these new systems!!

Regards,

Akram