Help me using Parabolic SAR/Curve

Hi guys,

I need some help here on how exactly to use the Parabolic SAR or Curve in the trending market? Where and what we actually exit on the most optimum level.

Thanks for anybody who willing to help with this :rolleyes: :slight_smile:

You gotta look at the position of the lines of dots

IF above the line THEN indication of down trending
IF below the line THEN indication of up trending

HOWEVER it is inaccurate as leading price indicator, I used it as lagging price indicator, after some callibration work (Not easy!) , if combined with other lagging indicators such as SMA and Boll. Band, it can increased the weight of evidence for a trend reversal or trend monitoring tool (worked better in long run trend)

When you got the parabolic sars on but you dont see a trend i.e. the lines of dots are changing positions too often, its probably because:

(1) There is no trend in instrument you’re looking i.e. too volatile perhaps


(2) You got the callibration doesnt reflect the behaviour of the instrument you’re looking

I think parabolic should be adjusted for different instrument, I got different callibration for different instrument. As long as the objective ‘To detect a prevailing trend OR/AND signal its reversal’ is satisfied, I think whatever your callibration is, its good enough. You might also want to make in line with other indicators/oscillators.

Hope that helps

I like using parabolic SAR on trending pairs, and I definitely agree with Reza about calibrating based on the pair you are studying. I invest the time when I watch a new pair testing the different settings to see which apply for the behavior of that pair.

Try to get an understanding of what the indicator means, try a google search, investopedia, etc. One explanation that I saved as a favorite when I was learning this

Parabolic SAR – Technical Analysis Education

I don’t find this indicator to work in a range bound situation, only for trends.

You’ll succeed if you "do the homework"

Yep thats right, only trend, and on its own, the parabolic is useless as buy/sell signal I think.

On optimum exit point, I’m currently looking at a longer period of time, say around 3-12 months positioning, so for me I would aim for MAX peak or MIN trough. I see more profit in it :slight_smile: .

How about using trailing stop? If you’re looking at intra-day trading, a tight trailing stop, even at 10 pips can cause enough damage to your profit but if you can take it, then try it. I think you should use trailing stops when the movement reaches around 40-60 pips, which is very frequent in in the intra-week movement.

For me I constantly widen the trailing stop range as the new peak/trough (which can be around 100-200 pips above/below the entry point :slight_smile: ) to guard my position, then narrow it down to lock the position when preparing to exit.

Oh btw, I’m still on demo trading and currently building my own system. If you find any doubts or mistake in my explanation, please point it out and I wouldnt mind discussing it, after all this forum is for us to learn from each other :slight_smile:

Hope that helps

PS: Guys, do you know any broker that offers good carry trade policy? (Besides Oanda and Interbank FX)