Hello all,
I’m a newbie at the pips school. I’ve made it up to almost the end of elementary without any snags, but just today there’s a phrase on parabolic SAR that has me all discombobulated, making me think I’ve had the wrong idea all along. I hope to get me some sage wisdom pips to help me sort it all out. I suspect I may be over-thinking it:
At the bottom of the parabolic-sar page (www dot babypips dot com fwd slash school fwd slash parabolic-sar dot html)(I’m not allowed to provide the link directly) it says "In early June, three dots formed at the bottom of the price, suggesting that the downtrend was over and that it was time to exit those shorts.
If you stubbornly decided to hold on to that trade thinking that EUR/USD would resume its drop, you would’ve probably erased all those winnings since the pair eventually climbed back near 1.3500."
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This messes me up. Exit is a sell, which is something you try to do at the top of a trend, not the bottom of a rising trend - that would be an entry (a buy). Have I learned it all wrong all along? I don’t think so.
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Also, it says by holding on you would have erased all those winnings? By holding on you would have gained major pips as far as I can see, and would have done extremely well to sell it at or near the 1.35 mark!
What is going on with this explanation?
Many thanks in advance