Parabolic SAR question

[grudovz]

Hello fellow traders.

I just have a quick question about P. SAR and Ichimoku indicators. Any help is greatly appreciated ))

So in the school it says:

Cover and go long when daily closing price crosses above ParSAR

Cover and go short when daily closing price crosses below ParSAR

I cannot understand what this strategy entails. Is not ParSAR indicator showing you price momentum and Buy/Sell signals, in a manner of dots above/below price? How is it possible that daily closing price could cross over Parabolic SAR ?

Also the following for the Ichimoku Indicator:

Cover and go long when conversion line crosses above base line

Cover and go short when conversion line crosses below base line

Which one is which. I could not understand from the school topic alone. Plzzz help.


Thank you for your time.

Jay

[grudovz]

Anyone ? Would somebody with more experience clarifiy this for me

[JJ6845616]

Probably it means that when the dots appear above the current price on daily chart You should cover your longs and go short and vice versa.
When Chinkou span crosses the Keijun sen in downward direction we should go short and vice versa.In short words we should follow Chinkou span to cover profits/losses and triggering orders.

[emeraldorc]

SAR just tells you when to enter or exit trade. Basically a change in momentum.

If the dots appear above the chart, bearish momentum. Go short. If they appear below go long.

I have started using SAR together stochastic (I hope I said this right) to verify.

[d-pip]

Hello fellow traders.

I just have a quick question about P. SAR and Ichimoku indicators. Any help is greatly appreciated ))

So in the school it says:

Cover and go long when daily closing price crosses above ParSAR

Cover and go short when daily closing price crosses below ParSAR

I cannot understand what this strategy entails. Is not ParSAR indicator showing you price momentum and Buy/Sell signals, in a manner of dots above/below price? How is it possible that daily closing price could cross over Parabolic SAR ?

Also the following for the Ichimoku Indicator:

Cover and go long when conversion line crosses above base line

Cover and go short when conversion line crosses below base line

Which one is which. I could not understand from the school topic alone. Plzzz help.


Thank you for your time.

Jay

Grudovz,

I’m not 100% sure about this but I think the Parabolic SAR was designed to be used as a dynamic trailing stop loss.

IMO it’s a weird unreliable indicator, sometime it seems to work perfectly, and other times it gives the craziest most useless signals.

I would suggest you use it only as confirmation with another more reliable signal.

Again, the StockCharts web site will give you the mechanics, inter workings of the P SAR.

Ichimoku!!! I have to head out for a while when I get back I’ll post a PDF explaining almost everything you’d want to know about the Ichi. It’s a very interesting indicator, one of my secret weapons!

[JJ6845616]

P Sar mostly work for the trend traders but i think that most of the traders dislike it.

[d-pip]

Grudovz,

Here is the attachment for the IchimokuWiki PDF.

IchimokuWiki.PDF

The “IchimokuWiki” is a great learning resource for anyone wanting to understand and test this very cool trading method.

If you have any questions please feel free to ask!

[grudovz]

Thank you everyone. I do not intend to use the P.SAR on its own I only use it as confirmation, but in the school article they posted some P/L figures based on certain strategies and I wanted to know what these strategies are.

d-pip thanks a lot fot the pdf, much appreciated. Have a lot more to learn before I can use it effectively

for the Parabolic SAR as I understand it is the only way it can give a signal then?
Dots below price= buy,
Dots above price=sell

right now I am using it in conjunction with MACD and SMA's and it has been working out well, but maybe I am just lucky, don't know how to program a strategy to backtest it...

[d-pip]

Thank you everyone. I do not intend to use the P.SAR on its own I only use it as confirmation, but in the school article they posted some P/L figures based on certain strategies and I wanted to know what these strategies are.

d-pip thanks a lot fot the pdf, much appreciated. Have a lot more to learn before I can use it effectively

for the Parabolic SAR as I understand it is the only way it can give a signal then?
Dots below price= buy,
Dots above price=sell

right now I am using it in conjunction with MACD and SMA's and it has been working out well, but maybe I am just lucky, don't know how to program a strategy to backtest it...

Grudovz,

Way back when babypips was really a baby there was a thread “45 Pips Per Day System” started by “James”. The P SAR is part of the method used in the thread, take a look at it and you’ll see how the P SAR and the MACD is applied in a fairly simple trading system.

45 Pips Per Day System Eur/usd

I know some people used the method with some success, but it seemed the thread would have been better if titled “20-30 Pip Per Day System” LOL.

for the Parabolic SAR as I understand it is the only way it can give a signal then?
Dots below price= buy, YES
Dots above price=sell YES

[grudovz]

thanks again