Parabolic SAR - that's all!

[dpaterso]

Good (Sunday) morning everyone,

Akram - funny you should say that it takes a long time to get valid entry points with these systems. I was actually thinking about that yesterday and it seems to apply 'across the board' as it were i.e. it appears to me that the amount of profit that a position eventually makes is in direct proportion to the amount of time that you had to wait to enter the position in the first place (and I'm not trying to make a joke here either).

Don't know - just something that sort of 'struck' me yesterday or sometime last week.

OK - and now for the 'joke' part: I sincerely hope that the above IS in fact true i.e. I've been waiting long enough now to get some valid entried based on OUR 'rules'!!!

Regards,

Dale.

[dpaterso]

By the way - all of you is the USA:

When does DST 'kick in'???

I think it will affect me i.e. if some of my charts are updated at 06h00 here in SA - which is 00h00 New York time - then when DST 'kicks in' in the USA that means what??? - my 06h00 charts (00h00 New York) are now going to be updated at 05h00 SA time not??? There goes another hour of sleep!!!

I don't THINK that Bulgaria has DST. Does anyone know if Belize has DST? I suppose I COULD look it up myself hey!!! On the other hand it MAY be something that you all forgot about so consider this a reminder!!!

Regards,

Dale.

[dpaterso]

Totally 'off topic' but some useful (useless) information anyway:

This has NOTHING to do with Parabolic SAR BUT is a 'quick way' to make a few PIP's (not tried yet BUT will probably give it a bash tonight):

This is not a new concept by any means i.e. it is 'detailed' in 'Mastering The Trade' by John F. Carter (which is REALLY another excellent book but I won't bore you with the details because you people don't like reading it would seem) (neither do I if the truth be told UNLESS the reading material is yet another way of making money in this business). The name of the chapter however says it all i.e. 'The Opening Gap: The First and Highest Probability Play of the Day'!!!

I read this a while a go but never REALLY gave it much consideration UNTIL TODAY.

In preparing my daily worksheets for Mr Wilder's trading systems it has FINALLY dawned on me what this 'gap play' is about.

Basically - every day I update my worksheets (I'm building up a 'library' of worksheets for each Index, commodity, precious metal, and pair that I want to trade with Mr Wilders's trading systems BUT it's taking time TO DO IT ON MY OWN) - and every day I capture the open, high, low, and close price of an instrument. NOW - it's just 'hit' me that there IS a 'gap' between the closing price of an instrument (pair) on Friday night and the opening price of the same instrument (pair) on Sunday night!!! THIS IS THE GAP!!! Why this is significant is BECAUSE THE GAP HAS TO BE FILLED!!! SO - the play is this: if the closing price of an instrument (pair) on Friday night is HIGHER than the opening price of the same instrument (pair) on Sunday night THEN YOU KNOW that the 'gap' is going to be filled in the next day or two SO in this instance you would go long just after the open on Sunday night and TP when the gap is filled!!! Conversely - if the closing price of an instrument (pair) on Friday night is LOWER than the opening price of the same instrument (pair) on Sunday night then you would go short and TP when the gap is filled!!! Simple???

Have a look at your charts for the past couple of weeks and compare the opening price on Sunday night with the closing price on Friday night if you don't believe me!!! And - obviously - the bigger the 'gap' the more you're going to make (watch out for the high spread pairs here though)!!!

Now - the plot thickens!!! This was detailed in 'Mastering The Trade' BUT was being applied to stocks and the Indices (not Index futures but the 'proper' indices) BECAUSE these instruments ARE NOT traded 24 hours a day i.e. they open and close at the same time as the NYSE so there COULD be a 'gap play' every day UNLIKE forex pairs where they are traded 24 hours a day BUT I have just discovered ('Analysis-Paralysis') that THERE IS A GAP EVERY SUNDAY NIGHT!!!

See what 'reading' can do for you!!!

Anyway - use it - don't use it - interesting though!!!

Regards,

Dale.

[ottober8]

Dale,
Interesting
What kind of theory to say that the gap MUST be closed?
I miss

Claudio

[dpaterso]

Hello - glad to see I'm not the only 'dedicated' one!!!

I just read the chapter again (and again) and - unless I'm missing it - there is actually no explanation as to 'why' just that they WILL ALWAYS be at some point in the future (according to the book).

In looking at the charts it EVEN happens of EUR/USD (sometime later I'll put the data down on paper and post this information with an accompanying chart).

Just quickly (I have to go and make lunch - we're having ANOTHER 'braai' or 'barbeque' here today) - last week EUR/USD closed at 1.3876 on Friday night and it opened on Sunday night at 1.3866. Now - you may say to yourself - 'so what - that's only 10 PIP's - less the spread of let's say 3 PIP's - so you're only making 7 PIP's - not worth the trouble' - right - BUT - NOW let's say that these are GUARANTEED PIP's - that's a different story is it not??? In other words - throw enough margin at it - so that you're making $100 per PIP - that's $700 profit on one position in a matter of hours - throw even MORE margin at it - it could be $7000!!! Get the picture??? (I only NEED about $10K or $12K to pay EVERYTHING at the end of each month). The gap was closed, by the way, sometime between Sunday and Monday - I suppose I could get the exact times by looking at the 1 minute chart - if necessary!!!

Just checked (for interest sake): the gap was closed 7 hours later.

Now this COULD get even more interesting BECAUSE there are SOME pairs that WILL have a 'gap' just about EVERY DAY e.g. USD/RUB. Why? Because this pair can only be traded at certain times i.e. not 24 hours SO let's say for example that after trading closed on this pair there was some HUGE event that took place between the close of trading on this pair today and the opening of trading on this pair the next day - it could be HUGE because the 'payoff' of this pair is very high (OK - so is the spread - but I suppose that's a judgement call).

Anyway - to be sure - I need to 'delve' more deeply into this - but so far - I CAN see that there definitely IS a gap at least once a week (can you believe it's taken me nearly 42 years to learn what 'the gap' is) - BUT - the risk involved here needs to be assessed (according to the book the gap is NOT NECESSARILY filled the next day and could take DAYS to fill so you have to make sure you have LOADS of margin to make REAL money out of this).

Actually - if I have a good look at the above statement of mine - Parabolic SAR - you're STILL the best!!!

Regards,

Dale.

[dpaterso]

Sorry - I just interrupted my lunch to come and post this because something has been 'bugging me' (and I don't want somebody trying this tonight and swearing at me tomorrow - AND - I'm 'on the Rum' again - so I might NOT make it back here tonight - it's a public holiday here tomorrow so I can AFFORD to have a 'slight headache')!!!

Anyway - be VERY careful if you're going to try this (at least until we've 'checked it out' more thoroughly).

What's been 'bugging me' is this: remember that I said in a previous post that Delta does not give you a 'Sunday' candle or bar WHICH IS GOOD? BUT - if you are going to 'give this a bash' just make VERY sure that when you open the position that your opening price IS NOT ALREADY equal to the closing price of Friday i.e. if there is an hour delay (so that you're not getting a 'Sunday' candle or bar) the price COULD already have moved so that it's back to the closing price of Friday by the time you get the new candle or bar - in which case THERE IS NO LONGER A GAP!!!

Look - this is obviously a 'valid' trading idea - but - like anything else - it needs some more 'analysis' before any REAL money is 'put on the table'!!! Like I said (from the book) - it DOES work on stocks etc. etc. etc. - I just HAPPENED to notice 'the forex gap' this morning!!!

And - then again - is this not just trying to make a 'quick buck' - which is against EVERYTHING we've worked for on this thread???

Regards,

Dale.

[dpaterso]

Man - I 'gotta tell ya' - this thread AT VERY LEAST has some 'class' - you will not BELIEVE the 'sh1t' that is going on in some of the other threads on babypips!!!

Anyway - what I'd like to know - is 'WHERE THE F' IS EVERYONE'???

It's Sunday night people!!! TRADING IS OPEN EVERYONE!!!

On a 'SERIOUS' note - please feel free to skip over my (our) 'classy' posts - BUT - PLEASE - could someone give me (us) an answer to the DST question!!!

Regards,

Dale.

[droesparky]

Here ya go dale looks like you have some time before it happens

Daylight Saving Time - When do we change our clocks?

[rhodytrader]

Originally Posted by dpaterso

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 Forman' ('rhodytrader') to explain this to us.

Quadruple Witching is when stock index futures, stock index options, stock
options and single stock futures all expire.

[bylex]

Hey there, i've been trying this SAR only system on shorter time frames and its been working quite fine! Have any of you had an experience trying to trade with this system on a shorter time frame? If so, did you use any more indicators?

Thanks in advanced!