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.
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.
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!
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.
[B]d-pip[/B] 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…
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.
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.
[I]
for the Parabolic SAR as I understand it is the only way it can give a signal then?[/I]
Dots below price= buy, [B]YES[/B]
Dots above price=sell [B]YES[/B]
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!