OK - well - this is not the post I was talking about - but I’ll just reply to you quickly on this.
I don’t know what broker you are (were) with but it sounds like the lot sizes cost too much for the capital that you were starting with (I say this because one lot of one pair managed to margin call your account). One of my (forex only) accounts is with a broker called Delta Stock. Your lot size can start from 1000 units and you can work on a 200:1 leverage. Just to give you an idea you could have opened 1 lot of GBP/JPY of 1000 units last Thursday and this would have used $10.12 of your margin. This single position would now be showing a profit of $49.74 (as I type this message) just by using Parabolic SAR (I’m just taking my positions and dividing them by 10 to give you a comparison because I have set my minimum lot size to 10 000 - which you can do yourself by the way at this broker). I currently have 26 lots / 26 pairs open - all based on Parabolic SAR entry since last Thursday (3 I opened this morning though) - and they are currently showing a profit of $3947.70 (in your case this would be $394.77) but think about it - in no time you could build your account to the point where you could increase your lot size.
It depends on your broker I think. 1 lot at my ‘main’ broker costs $50 regardless and 1 lot at my other broker costs a mininum of $100 for 0.1 of a lot. Can you see the difference? It’s a lot easier to get margin called at the other two brokers (trust me - I speaking from experience). Anyway - Delta is going live next month (so I’m told) with CFD’s, Indices, and Commodities - so I’ll be moving my ‘main’ account to them.
Hope this helps.
Oh - by the way - I’m talking about Daily and longer.
Say you have went short on a USD/CHF position when it pierced the parabolic dot on the 4 hour chart. And then at a later point, the currency pair kept heading south and pierced the parabolic dot on the daily chart as well. At what point might it be a good idea, or acceptable to add to your position, and short some additional lots?
I am with FXCM and i have a mini account…but i guess with $500 deposit and if i just trade one currency pair i think it should be alright as according to the 5% rule i can put a stop loss of 25 pips.
Good question - and I’ve been wondering about that.
Put it this way - I reckon - if you have enough margin - then why not add if the price pierces PSAR on the next timeframe up? If the truth be told that is exactly what I did this morning on AUD/USD (I hope I’m not going to regret this but my explanation is coming shortly). I closed my position of Friday (‘gutless’) but when I saw that the weekly had pierced PSAR this morning and the first PSAR dot had already appeared on the top I reopened the position. Now if I was not so ‘gutless’ I would still have had my Daily AUD/USD position open from Friday and I would have opened another position based on the Weekly this morning and had two positions open. Just remember to move the right stops i.e. move the Daily stops on daily and the Weekly stops weekly if you know what I mean.
Sorry - the previous post was with regard to adding to positions.
gengan:
Just remember this: if you are going to start using Parabolic SAR then Parabolic SAR actually tells you where to put your stops. In other words - depending on the trade - your stop loss according to Parabolic SAR MAY be much more than 25 PIPs so you need to make sure that you have enough margin to get stopped and then still stop and reverse etc. etc. The only reason that this appears to be working is because I am not ‘mixing’ one theory with another or one rule with another. Take a look at some historical data using Parabolic SAR and you will find that often the price has retraced far beyond your opening price BUT because you were using Parabolic SAR to set your stop loss the price has changed direction and put you in a profit situation. Had you set a fixed stop loss on that type of trade you probably would have been stopped out prematurely.
Ok - well - I thought I’d keep this thread going - so that we can see where we are at with this indicator (and if the truth be told - it keeps me away from my trading platforms and also serves to keep me in check)!!!
Here are just some thoughts and observations.
First: I reopened my short position that I closed on Friday. Why? Mainly because I’m giving all of this advice about sticking the trades through and letting them run their course based on Parabolic SAR and then I’m doing the total opposite - not fair - not good!!! Also - I had a look at the Weekly chart for AUD/USD and this morning the very first PSAR dot appeared on the top of the new Weekly bar so - in keeping with my experiment and my own advice - if I was trading the Weekly charts - I would have entered a new short position here anyway. I hope I’m not going to regret this!!!
Second: I can see why people (myself included) give up on this indicator very quickly and easily. The main reason I think is because when you open your very first position using this indicator you may have already missed a major move AND you therefore would have made an immediate initial loss. The trick, as far as I am concerned, is to take this (possible) initial loss and remember to stop and reverse. Once you have got to your first stop and reverse then you should be good to go for the long haul.
Third: I have on two occasions this morning attempted to ‘second guess’ the indicator. Take a look at the attached Daily for GBP/BGN (that’s the Bulgarian Lev if you’re wondering). I’m taking a chance by second guessing the indicator (this is not a good thing especially with AO) BUT I’m thinking (hoping) that because PSAR has been penetrated already that tomorrow’s first PSAR dot will appear above the new bar and I will be in the trade early. If not - I’ve set a small stop loss i.e. just above the high of the current bar just in case I’m wrong. If the price decides to go up I’ve not lost too much and will then have to wait until the first PSAR dot actually does appear at the top if the price then decides to move down again.
Fourth: If you’re lucky like me - you don’t necessarily have to set stop losses. Got you there!!! No - what I’m saying is this: at Delta - instead of setting a stop loss - I can place a stop order to close my initial position and then open a new position in the opposite direction thus giving me an immediate stop and reverse. In other words - let’s say I opened with 1 lot. Instead of setting a stop loss (of course based on the value of PSAR) I place an order to ‘dispose’ of 2 lots in the opposite direction. The first lot will be closed and a second lot will then be opened in the opposite direction thus an immediate stop and reverse. Be careful though - if I did this at my other two brokers I would land up with a hedged position which almost always turns to ‘sh1t’. The only way to accomplish this at these two other brokers would be to place a stop loss AND a stop order in the opposite direction and then hope like mad that they BOTH get executed ON TIME AND AT THE CORRECT PRICE!!!
OK - well - I have just ‘second guessed’ the indicator again on EUR/CAD (see attached chart) i.e. Parabolic SAR has been penetrated.
Actually - it’s not ‘second guessing’ the indicator - if you really think about it - had I been in a trade prior to the penetration - I would have stopped and reversed at this point anyway - the only difference being that you don’t have a corresponding PSAR dot or value to use for your stop loss at this point.
I must just tell you that this is really ‘unstressful’. My (one) trading platform will automatically send you an email when a stop is hit so I just redirect these emails to my cell phone so that I know if a stop has been hit - so as long as my cell phone does not go ‘beep’ I know I’m still trading in the right direction! So far - no beeps - since last Thursday!!!
Oh - and by the way - EUR/SEK is getting close now.
Just wanted to share… I don’t know if its beginners luck, or a testament to the effecitveness of this system but… I’m currently in 3 positions. Long USD/CAD & EUR/USD & short USD/CHF. And I’m in positive territory in all 3.
I’m using 4 hour and day charts. A week chart on the USD/CAD, I noticed a new parabolic dot opened on the weekly chart for this currency pair.
My question is… what is an effective strategy for exiting a position. My charting package don’t have an accelerating/decelerating ossicilator. At least I havn’t found it yet if it does. Are there any other technical indicators I could use?
I hope (for your sake and mine) that it’s not beginners luck!
It might make you feel better to know that I now currently have 27 open positions / 27 pairs and only 4 of them are showing a small loss at the moment - the others are all in the green.
As far as an exit strategy is concerned - remember that your stop and reverse is (supposed to be) your exit strategy if you are basing your entire ‘system’ on this indicator. I know that the most difficult thing in the world to do is to stick it out until the stop and reverse comes. It’s so difficult because you know that at some point the huge profit that you may be showing on a position has to reduce at some point in order to get to the stop and reverse point. The hope is that when it eventually does reverse you have already locked in profits well down the line so that when the stop and reverse point gets hit your profit does not get reduced by too much. On the other hand I’ve had a look and found many trades where a trend has started and just kept going and going to the point where Parabolic SAR only gets penetrated with small loss of a couple of PIP’s when ‘violent’ reversal comes - that’s the ideal situation.
I have a thought. This system could probably also be used with success on smaller timeframes than the daily with one exception. Trading would need to begin at around 6ish GMT morning and end at around 5ish EDT. That way you can ensure volatility will be maximised (a ranging market will kill this system).
I realise an ea would be simple to make with one indicator, but if someone could code one with some simple money management and EA execution timing, I’d be happy to run some forward tests on it on various timeframes.
wow, the USD/CHF came within a nosehair of piercing the daily parabolic dot at 1.2005 on yesterday’s daily chart. The low came RIGHT UP TO that point.
I’m thinking there is a very good chance sometime in the next couple of trading sessions, the price will pierce the new daily parabollic dot at 1.2007. When that happens, I’m thinking to add another short position to my existing short position.
The 30 min, 1hr, 2hr, 4hr, daily, weekly & monthly would all be going the same direction. To me, that seems like a pretty powerfull confluence of timeframe indicators.
OK - well - I’m glad everyone else is so happy this morning - I’m not!!!
Right now 10 of my 27 positions / pairs are showing a loss (albeit small) - what happened last night???
At my other broker:
AUD/USD is starting to eat my profits from last week!!!
EUR/GBP pair is NOT doing as well as I hoped!!!
On the other hand - about five minutes after I started updating my stop and reverse positions they started to move in the right direction again. Maybe I should not sleep and we’ll all do well!!!
Anyway - in keeping with my own advice - I WILL NOT EXIT ANY OF THESE POSITIONS UNTIL I GET STOPPED OUT I.E. STOP AND REVERSE OR WIPED OUT (that statement is more for me than anything else but you get the picture)!!!
My 27 positions / 27 pairs that I have open at one broker - which were showing a nett profit of $3947.70 yesterday - are now showing a nett profit of $1169.33 as I type - and - I even watched the profit dwindle to somewhere around $500 today!!!
BUT!!! BUT!!! BUT!!!
As a show of good faith - and in keeping with my own advice - and to save face - I HAVE NOT CLOSED A SINGLE POSITION MANUALLY - AND WILL ALLOW EACH POSITION TO RUN TO ITS LOGICAL CONCLUSION BASED ON THE INDICATOR!!!
No - seriously - my first inclination is obviously to bale out - especially on the positions that are showing a decent profit - and there are quite a few (about five are around the $200 mark and there are quite a few more around the $100 mark) - but - I am tired of looking at historical data and saying to myself ‘how come I got out here and did not let the trade run’ and ‘why did I not wait - just look at what I could have made’ or ‘now look - I closed the position and took a loss - and now look where the price is’. I have made THOSE statements many many more times in the last six or seven months than I have made statements like ‘wow - I’m glad I got out when I did’! Get the picture?
So far - I think that because of what happened to the JPY and AUD since last Thursday - I got a false sense of security i.e. the initial immediate profits I made using this indicator this time round were inflated. Having said that - I do believe that although the profits to be made are not as great as they could have been i.e. not maximised - there will nevertheless be profits on most of the positions at the end of the day.
Of course - when things start going against you - you start flipping between different charts and different time frames and different indicators mainly I suppose to reassure yourself. One thing I did seem to see though - was that it certainly does appear that you could make more on smaller time frames - like 4, 2, and 1 hours - there just seems to be more movement and this, of course, goes against everything I have said here. On the other hand - having said that - all of my open positions have manged to ‘ride out’ every single bit of news data that has come out so far - and - just to give you an example - I’m pretty sure that when the BOE announces its interest rate position tomorrow (or the next day - can’t think right now) - my positions will be able to take the spike - that’s the difference - in my opinion anyway.
Put it this way - if this indicator does nothing else for you - it sure will teach you self control and patience!!!
Edit: the main ‘problem children’ seem to be AUD, CAD, NZD and ZAR. Why? My ‘educated’ guess is because - at the moment - Crude Oil is above $78 a barrel and Gold has been trying to get some direction the whole day. I reckon Oil is nearly at its top - and when that comes down - so will Gold - and I’ll be a happy camper!!!
Regarding timeframes. I personally feel the 4 hour time frame is the best for me. Its big enough, and allows me to put S/L out far enough, to not get constantly triggered by every little thing that happens.
The 4 hour time frame also lets me actually trade every day. Where as the daily or weekly charts… I might not be trading but a few times a month.
Also, the 4 hour lets me set entry points, and then only adjust those entry or S/L points, every 4 hours. So… I don’t need to be glued to my computer.
I’ll even go so far to set a limit out around 50-60 pips from my entry point, based on the parabolic dot, and I’m not to concerned, I’ve “missed the boat” as far as profits go.
I’d rather take 50-60 pip profits, then keep adjusting my S/L based on how the parabolic dot moves, with the hope of some BIG explosive trend.
In baseball terms, I’m looking for singles and doubles. If the long ball happens, it happens.
I am happy to hear of some success with a kiss formula. I am checking this system out for myself, just can’t settle on a timre fram. One thing i cannot figure out is why you are struggling with closing down a position in profit. Rather you seem intent on following through on a strategy of exiting that is based on your PSAR dots. This is very odd to me. You have already won, you are in the black and are in nice pipage. You have beaten the system. Why not just close them down when you see a nasty sell candle or with some sort of a trailing stop? To me this is kinda like a poor man who wins a bunch of money than spends just as much time fretting on how to spend his new fortune than he did when he was worrying about his bills.
The reason I’m sticking to it is because - like I said before - I ALWAYS have a habit of ‘bailing out’ too soon - and Parabolic SAR has a nasty habit of testing your resolve to the limit - and - when you finally give in - it’s uncanny how the pair breaks out into a nice trend.
Put it this way: on 27 pairs - I’m no gambler - but the chances of every single one of those getting stopped out based on PSAR are pretty slim and at least a few of them have to eventually trend for a couple of days - I want to be in for that.
Aside from that - this really is just an experiment on what was practically two ‘wiped out’ forex accounts. I only trade the Indices and Stocks now and don’t use PSAR for these. I just thought - let me test my OWN resolve - and let things take their course. Hey - if it works out - I can just keep trading forex like this until the cows come home - very little maintenance - and - hopefully - if I’m right - long term profits - scalping has not worked for me - ever.
Put it this way: it’s the last day of the month at 14h56 New York time - and I am now going to post the fact that as I type the profit on this account is sitting at $1937.97. I will not ‘top up’ this account for the next month - and - if it gets wiped out - I’ll update this thread - and - if it does not - I’ll post the profit figure on the last day of August. That would be a fair test would you not say? Oh - and I will ONLY use PSAR - nothing else.
That is a valid point. That is why, using this strat, once I enter a position. I use a 4 hr time frame, place my S/L where the new Parabolic dot appears, and then place a limit order out, 50-60 pips from where I entered.
From looking at the charts, if you go with the higher volume pairs, this seems to be a reasonable expectation for profits. Its simple, and I don’t have to stay glued to the computer
obtw, just to clarify something regarding the S/L. Say… I’m long USD/JPY 2 mini lots. I have my S/L set based on the current position of the Parabolic dot. But I set it for 4 lots, not 2. So if I get stopped out, I immediately get placed back in the trade, this time short, 2 mini lots.
I assume others do that, and don’t actually place 2 different orders. 1 to get out, 1 to get back in.
It depends on your broker. At one of these brokers I can place an order for - like you say - double my current amount of lots and that will effectively close out the first position and open another one in the opposite direction i.e. stop and reverse. At the other broker - if I did this - I would have to place a stop loss AND a stop order at the same price to accomplish the same thing. Be careful though - I have seen it happen (you’re not going to believe me I know) on more than one occasion - where the one order has been executed and the other has not been executed or the price has been slipped on either or both orders. This results in a ‘hedged’ position which, like I said before, always turns to ‘sh1t’.
OK - well - I just came to check (can’t help myself you know)!!!
Anyway - I’m now on $3017.98 - at 17h25 New York time (which is 23h26 here in SA so I am going to get some shuteye).
I’m not going to update this thread with my figures on a daily basis - but - I suppose I just wanted to demonstrate the value of patience and trusting the indicator thus far - hope it pays off in the long run.
Another good example - by the way - is AUD/USD - which I was very worried about - but - even after a ‘nail biting’ session for me today - seems to be going in the right direction again.
