yes I’m working on 1h chart, but it works the same, right?
Dale,
Great post, I’ve funded an account and now I’m just waiting for the PSAR dots to reverse so I can jump in on various pairs.
I look forward to more of your writing,
Thomas
Good morning!
Thanks Thomas for the compliment - much appreciated.
I must just stress one thing - once again:
Do not be misled by the profits that I made this past week.
I WAS kicking myself yesterday morning for closing out those positions that I had open on Thursday but after the Fed stepped in yesterday stocks started ‘stabilizing’ as it were and the price of all of the pairs that I had open reversed big time. What this means is that my getting out on Thursay afternoon was more luck than anything else it would appear and this makes me feel even worse. While I am obviously happy that I cleared out with so much profit it feels that I was not really trading for these profits and I cannot afford to nor wish to have a ‘windfall’ like that once every six or seven months.
I am going to follow the price of those pairs that I had open this past week with Parabolic SAR until the stop and reverse point and try and calculate what my actual end profit WOULD have actually been had I not taken my $50K profit on Thursday and I will post the figure.
What I’m saying is that I don’t see how you can lose in the long run with Parabolic SAR BUT the profits that I made on Thursday CANNOT be used as yardstick so don’t get discouraged if it turns out that you are not making HUGE IMMEDIATE profits like I did this past week.
If you like (I’m trying to think how we can do this) maybe we can start posting messages when new Parabolic SAR Dots are appearing i.e. every time one of us opens a position maybe we should post the details of those positions and follow them through together as they go. This would be a good test of the different representations of Parabolic SAR at different brokers at very least and maybe we can compare notes as it were and what works for one person may not necessarily work for another (although with this indicator I don’t see how any of us could get very different results let’s face it). Also - Trading is a lonely sport you know!!!
Anyway - let me know if you are interested.
Regards,
Dale.
Dale,
That’s a great idea. Keeping track of when dots appear depending on brokers and such might yield small advantages. Maybe some brokers dots appear earlier, and we do know that depending on your broker the dots can be slightly different. Perhaps by combining our knowledge we can make better trades. Congratulations on your good fortunes using the PSAR, but you’re right, if you had stayed in and waiting or the actual dots to reverse before reversing your position (or leaving them completely) you would have made less money. It still would have been a good profit, but not as much!
I’m going to send your a PM and hopefully you and I can find a way to correspond. Maybe an IM client, some kind of SMS, or what have you.
Have a great day,
Thomas
P.S. It is relaxing that the market is closed on the weekend.
Hi Guys, Im new here and this is a great forum!
Just started trading and such a newbie at this. Question: where do I get this parabolic SAR signal? Thanks
Good Morning All,
orgcaptainnemo:
OK - well - I think from tonight I’ll start posting the positions I open (if any) on this thread.
I have drawn up an Excel Worksheet with all of the pairs listed that are available to me with a column for ‘Monthly’, ‘Weekly’, and then five columns for each day of the (this) week. The idea being that I am going to see how many Parabolic SAR signals I can get this week that ‘agree’ with each other i.e. I’m going to check that Parabolic SAR on the Monthy and Weekly are going in the same direction and then enter only when the Daily is giving a signal in the same direction. I’m just keen to know if this works any better than just opening positions on all and every pair where there is a valid signal on the Daily chart. The drawback of this I think is that you are going to get far less entry points but maybe the movements are more ‘true’ as it were and the lot sizes could be increased to better the results with less of the risk doing it this way. Someone ealier on in this thread posted that on a certain pair the Monthly, Weekly, and Daily Parabolic SAR were all going in the same direction and entered on the four hour chart but I don’t know what the end result was - they never posted again.
alan003:
Parabolic SAR is one of the most common (and oldest) indicators around and is contained in almost all of the chart tools / available indicators of the trading platforms that I have seen. Sometimes it’s just called SAR or ‘Stop and Reverse’ but it’s usually there.
Regards,
Dale.
Hi,
Sorry but I can’t comment on forex.com as I have never looked at their platform nor had an account with them.
There is a section on babypips.com dealing with traders’ experiences with different brokers - have a look over there as there.
Regards,
Dale.
Sunday, 19 August 2007
17h00 New York Time
23h00 South African Time (GMT+2)
00h00 Bulgarian Time (GMT+3)
Valid Parabolic SAR Entry Points (Daily Charts):
AUD/NZD - Short
CAD/CHF - Long
EUR/NOK - Long
GBP/CAD - Short
GBP/NOK - Long
Note: I am not ‘comfortable’ with any of these positions to be quite honest with you BUT these pairs have valid Parabolic SAR entry points so I’m getting in.
I must just mention that I have scrapped the checking of the Monthly and Weekly Charts as previously mentioned. As I suspected: out of forty four tradeable pairs there is not a single pair where Parabolic SAR on the Monthly, Weekly, and Daily Charts is moving in the same direction at the moment. Should you wish to use another timeframe as confirmation I suspect that the best that you could do is use one timeframe up (longer) i.e. if you want confirmation on the Daily Chart then check the Weekly. It appears that the number of times that the direction of Parabolic SAR on the Monthly, Weekly, and Daily Charts is the same are few and far between and as patient as I like to think that I have become this is stretching it even for me. Just going through all of these pairs tonight looking at all the different timeframes is just going to cause confusion and doubt as to when to open a position (in my mind anyway) so I’m going to stick with what has worked for me in the past i.e. looking only at the Daily Charts.
The good news is that I have a feeling that there are some MAJOR reversals coming soon particularly on AUD/JPY/NZD/CAD/EUR/GBP pairs.
Comments welcome!
Regards,
Dale.
Dale,
you have done a terrific job thus far. Thank you for your ongoing effort. Just a few queries.
Are you keeping a record of your trades?
What is your win / loss ratio.?
How many concecutive winners / loosers ?
Do you use money management ?
What % of your capital do you risk per trade ?
What risk / reward ratio have you achived ?
What is the expectancy of the system ?
Have you tried defining the trend of the time frame you trade and then trading only with the trend and what was the result on profitability ?
When you encounter losses have you been able to identify the reasons why ?
Try using range bars and run SARS against this. Properly defined it will even out market noise and give you much tighter stop losses and SARS.
Would much appreciate hearing yours views on this. Kudos to you. All the best.
" I have scrapped the checking of the Monthly and Weekly Charts as previously mentioned." You should be checking these to give you an indication of trend and therefore it does not matter that they are not all pointing the same way.
" I have a feeling that there are some MAJOR reversals coming soon " can your preconceived feeling. Let the market do whatever it does you should just react. Your feelings will get you broke.
Good Morning Everyone!
byculla:
Thanks for all the advice, input, and encouragement - really much appreciated.
I must state once again that I stopped trading forex paris about two or so months ago - there was just not enough ‘action’ (for want of a better adjective) for me AND the fact that because of all the money that I had lost since starting out about six or seven months ago - I had started thinking that there was no way to make money out of trading forex pairs and started looking for alternatives to trade - and I found those wonderful things called Indices - and that is what I now (mainly) trade i.e. Dow, DAX, S&P, Nasdaq, etc. etc. (you get the picture). Now and then I would log into the trading platforms of the brokers where I could ONLY trade forex pairs and sort of just (almost at random) opened a position on a pair (loosely based on Parabolic SAR) and then forgot about it. I had never really had any ‘real’ money in these accounts and both of them were pretty much wiped out at one point. One day - for no apparent reason - I just decided to sort of ‘go for broke’ on these accounts and started opening positions on each and every single pair where there was a valid Parabolic SAR entry signal (up to the maximum that my margin would allow at the time) and - ‘hey presto’ - the balance of these accounts (one of them mainly because there were more tradeable pairs) - started to climb. I then decided to take a more serious look at forex again. I had already bought and read J. Welles Wilder’s Book ‘New Concepts In Technical Trading Systems’ a while before that (I just thought that with it being a sort of ‘classic’ it was one of those books that you should own) but never really seriously gave it anything more than a cursory read. After having another serious look at certain chapters in the book (mainly Parabolic SAR) I decided to give forex another ‘bash’ as it were BUT with the proviso that whatever ‘system’ or indicator I used for forex trading it should not detract from my other trading activities. Parabolic SAR just made ‘logical’ sense to me and after looking at historical charts it just appeared that the simplest of all of the indicators (by ‘simplest’ I mean the ‘simplest’ to implement and use - the calculations of Parabolic SAR are quite complex) always turned a profit IN THE LONG RUN (on the Daily timeframes and longer).
Why am I telling you this long story?
I know that there are many ways to improve the profitability of trades based on Parabolic SAR i.e. checking for trends, drawing support and resistance lines, combining it with other indicators, drawing pivot levels, etc. etc. etc. While the use of all of these additional concepts or methods most certainly will maximise your profits that is not what I am looking to do in trading forex pairs. What I am looking to do is to trade forex pairs with ‘very low maintenance’ and not get caught up in things that confuse me or will take up too much of my time and most importantly not have me rely on my ‘gut feel’. Parabolic SAR applied or used EXACTLY as it was designed by J. Welles Wilder appears to be what I was looking for. It tells me when to open a position, where to set my stop loss, when to take profit, and when to stop and reverse and takes me between half an hour and an hour each day to open new positions, stop and reverse on others, and move stop losses - that’s it. Low maintenance! And best of all - on the two or three occasions that I have used it AND FOLLOWED IT TO THE LETTER it has turned some nice profits especially when compared to the huge losses that I made in the beginning.
Now - after that HUGE preamble - let me answer your questions:
Are you keeping a record of your trades?
No - or rather - not a record of the outcome of a trade and the reason for that outcome. That would not be ‘pure’ Parabolic SAR and again - more maintenance. The only ‘financial’ record I have started keeping is my capital balance at the beginning of the week / month and my capital balance at the end of the week / month. That’s all that matters to me with this ‘experiment’ i.e. as long as the ending balance is greater than the beginning balance - I’m a ‘happy camper’.
What is your win / loss ratio.?
No idea. See above answer.
How many concecutive winners / loosers ?
Again - no idea. See above answer. On the other hand I can tell you that so far on the occasions when I have used this indicator I have always had 99% winners / 1% losers (so far).
Do you use money management ?
What’s that? (Only kidding). My stop losses (again) are based solely on ‘pure’ Parabolic SAR.
What % of your capital do you risk per trade ?
At my ‘main’ ‘forex only’ broker I am not limiting trades based on a % of my capital. I have (now) made sure that I have more than enough capital to be able to open a single position with a lot size of 100000 (the cost of which can vary between $300 and $1000 depending on the pair) on as many as forty four pairs at any one time should there be a valid Parabolic SAR entry signal with the proviso that at no point my free margin percentage drops below 30% (not allowed by this broker). If this happens - I close out the most highly profitable position(s) to free up margin (back up to 30%) and allow room for all the other open positions to mature.
What % of your capital do you risk per trade ?
See above answer. Based on that answer I could very well at some point have up to 70% of my capital risked overall. I’m not sure what the % risk of capital per trade would be as with this broker is varies according to the margin cost of the pair.
What is the expectancy of the system ?
I do firmly believe that if Parabolic SAR is used or applied EXACTLY as it was designed or formulated by J. Welles Wilder it will IN THE LONG TERM turn huge profits which I am unable at this stage to quantify. This view is based on my checking of historical data with Parabolic SAR applied. There WILL be huge drawdowns but in the end the profit appears to far exceed the losses OVER A LONG PERIOD OF TIME. Once again - I believe the ‘profitable rules’ to follow when using this indicator are as follows:
Open single positions on as many pairs (instruments) as you have available to you (the more the ‘merrier’) to trade
Ensure that you have LOADS of margin to be able to absorb the inevitable drawdowns
Follow the theory of Parabolic SAR TO THE ABSOLUTE LETTER
The reason for trading as many pairs (instruments) at a time is because, let’s face it, in a ranging market this indicator will kill you BUT the chances of having anything up to fourty four pairs stuck in a range for any extended period of time (I would think) are pretty slim AND then there is of course the inevitability that even pairs trading in a range WILL eventually break out and start ranging (that’s why loads of margin are important).
Have you tried defining the trend of the time frame you trade and then trading only with the trend and what was the result on profitability ?
When you encounter losses have you been able to identify the reasons why ?
Try using range bars and run SARS against this. Properly defined it will even out market noise and give you much tighter stop losses and SARS.
Again - see above answers.
" I have a feeling that there are some MAJOR reversals coming soon " can your preconceived feeling. Let the market do whatever it does you should just react. Your feelings will get you broke.
You are certainly not wrong there I can tell you. That is one of the benefits of using this indicator i.e. although I have a ‘feeling’ that some of those AUD and JPY movements last week are going to reverse soon (this ‘feeling’ based on the fact that I can see that Parabolic SAR is starting to accelerate now on those AUD and JPY related pairs) I will not enter any position until the indicator gives me a signal. Too true - a few months ago - I would just have opened a position because I ‘felt’ that a reversal was coming. These ‘feelings’ that I have from time to time have cost me many thousands of USD and made my brokers very happy!!! Up until two months ago or so brokers would kill to have a client with ‘feelings’ like me!!!
While my answers to you may appear ‘flippant’ I can assure you that they are not meant to be. The idea of this thread or ‘experiment’ is to prove the use of ‘pure’ Parabolic SAR. I’m not interested in making the ‘trade of the day’ (like I may be inclined to attempt with the Indices which normally results in disaster) - I’m just interested in having my ‘forex only’ accounts slowly ‘ticking over’ in the background making profits and, if this ‘experiment’ works - then there would be no reason for me not to trade my beloved Indices with Parabolic SAR as well (which I have not been doing by the way for the simple reason that I do not trust the representation or implementation of Parabolic SAR at the broker that I use to trade the Indices i.e. their representation of Parabolic SAR gives far too many false signals which ironically is what put me off this indicator when I first started out trading six or seven months ago. It turns out now, in my opinion, that there is definitely something wrong with the (default) way that their charting system calculates or represents Parabolic SAR and I have now managed to alter that representation to ‘match’ the representation of Parabolic SAR at my ‘forex only’ brokers. I need to monitor my changes before I start using it with confidence though - too much money on the table over there).
Once again - I need to make this point:
I believe that although ‘pure’ Parabolic SAR will not maximise profits in the short term it will certainly produce profits over the long term AS LONG AS YOU STICK TO IT AND WITH IT. If you’re looking to ‘master the trade’ then this thread is probably not for you. If you’ve tried everything else and it has not worked and the novelty of being a trader has worn off and you are now just interested in making a good living - then this thread - and Parabolic SAR - is (could be) for you.
And that my friends - is my ‘trillion dollars worth’ on input!!!
Comments always greatly appreciated and welcome!!!
And - BY THE WAY - what do I have to do to get a rating??? I’ve been trying (posting, typing, slogging, drivel) for seven months now!!!
Only kidding - BUT - if you decide to risk your REAL money and follow Parabolic SAR - and you do indeed MAKE money - GIVE THIS THREAD A STAR FOR CRYING OUT LOUD!!! IT’S NOT FAIR YOU KNOW!!!
On the other hand - like I have previously requested - if you have used Parabolic SAR and LOST money - then please post the REASONS and the CIRCUMSTANCES for those losses. For example: losing money because you ran out of margin does NOT disprove Parabolic SAR; losing money because you did not STICK TO AND WITH Parabolic SAR as it was designed does NOT disprove Parabolic SAR. See what I’m trying to get at?
Now can I please get back to the Dow (it’s going my way again today - yippee. Isn’t the Fed great)???
Good trading!!!
Regards,
Dale.
Interesting idea-
Could you post an example chart and explain what a “range bar” is. Many thanks
Hello.
I have also decided to post a sort of ‘Parabolic SAR Watch List’ on a daily basis (time and inclination permitting).
Basically this list will contain details of forex pairs where I ‘feel’ a Parabolic SAR Entry Point will shortly be presenting itself within the next 1 to 5 days.
If you feel that this kind of information is pertinent or useful then let me know - otherwise I’ll stop wasting space.
Monday, 20/08/2007
04h22 New York Time
10h22 South African Time
11h22 Bulgarian Time
AUD/CAD - 2 or 3 days
AUD/CHF - 2 or 3 days
AUD/JPY - 3 or 4 days
AUD/USD - 2 or 3 days
CAD/JPY - 3 or 4 days
CHF/BGN - 3 or 4 days
CHF/JPY - 4 days or more
EUR/AUD - 3 or 4 days
EUR/CHF - 3 or 4 days
EUR/GBP - 2 or 3 days
EUR/JPY - 3 or 4 days
EUR/NZD - 1 day
EUR/RON - 1 or 2 days
EUR/SEK - 1 day
EUR/ZAR - 1 day *** BE CAREFUL - GOLD PRICE DEPENDANT - SPREAD ***
GBP/AUD - 1 or 2 days
GBP/BGN - 3 or 4 days
GBP/CHF - 3 or 4 days
GBP/JPY - 1 or 2 days
GBP/NZD - 1 or 2 days
GBP/USD - 1 or 2 days
NZD/CAD - 1 or 2 days
NZD/CHF - 1 or 2 days
NZD/JPY - 1 or 2 days
NZD/USD - 1 or 2 days
USD/CAD - 1 day * HOT - PSAR ALREADY PENETRATED TODAY *
USD/RON - 2 or 3 days
USD/SEK - 2 or 3 days
USD/TRY - 3 or 4 days
USD/ZAR - 1 or 2 days * BE CAREFUL - GOLD PRICE DEPENDANT - SPREAD *
Parabolic SAR is accelerating ‘out of control’ on some of these pairs so watch them closely.
Please note:
NB:
The list above DOES NOT represent positions TO BE OPENED NOW - it is merely a list of pairs where it is my (educated?) opinion that a valid new Parabolic SAR Entry Point Signal is GOING to appear within the number of days from today as detailed above.
Like I said - if this is beneficial to anyone who is using ‘pure’ Parabolic SAR and following this thread - I’ll keep it updated as often as is humanly possible. If not - please let me know.
For those of you who think I’ve ‘lost the plot’ and want to use other methods or indicators for confirmation of Parabolic SAR Entry Points then you may be able to see a pattern in the above list which (theoretically) should fit with things like fibo levels, daily pivot points, trend lines, etc. etc. but I’ll leave that to the experts!
Regards,
Dale.
Hi Dale
from my opinion you doing great job as i follow the Parabolic SAR as well along with CCI and STOCH but they just helping me when to not enter and still wait but the PSAR on its self is more than enough for trading.once you have a patient most of your trades will be winning trades.im using 1hr chart with combination of 15min and 4hr charts.i hope you keep posting and i think as you already wrote in one of your post that we could open a life chat or some thread or anything.
just let me know or get with me on any of my messenger and i�ll be happy to talk with you.
have a good one Dale
Hi certicex,
Thanks for the kind words.
I just thought for interest sake that I would scan some images from the book and post them here.
I don’t see that either Mr Wilder or his publisher should have an issue with this as these images and the explanation thereof are more of a ‘tribute’ to him than anything else.
daily psar worksheet.jpg:
Manual calculation of Parabolic SAR
manual psar chart.jpg
How would you like to have to plot your charts manually like that and then still have to plot the indicator???
j welles wilder.jpg
A little bit of information about ‘the man’!!!
One thing that I have discovered is that when reading text like this you begin to ‘understand’ how and why the thing works as opposed to blindly using it. Also - good insight in the book as to how all of this started!
Regards,
Dale.
[B]I have also decided to post a sort of ‘Parabolic SAR Watch List’ on a daily basis (time and inclination permitting).
Basically this list will contain details of forex pairs where I ‘feel’ a Parabolic SAR Entry Point will shortly be presenting itself within the next 1 to 5 days.
If you feel that this kind of information is pertinent or useful then let me know - otherwise I’ll stop wasting space.[/B]
You certainly have had my attention for a few days Dale.
Well done.
I am planning to sort through your fine thread and contribute positively in a day or two. Please do post your findings (as above).
With best wishes
Ingot
Hey - thanks Ingot54 - and your input would be greatly appreciated.
Monday, 20 August 2007
17h00 New York Time
23h00 South African Time (GMT+2)
00h00 Bulgarian Time (GMT+3)
Valid Parabolic SAR Entry Points (Daily Charts):
USD/CAD - Short
Only one! Boring! Slow! Frustrating! Looks like quite a few coming tomorrow though - will update the ‘Parabolic SAR Watch List’ tomorrow sometime.
Net loss (at the moment) - six pairs - $207.43 - being ‘dragged down’ badly by AUD/NZD and EUR/NOK - the other four pairs showing OK (smallish) profits almost offsetting AUD/NZD and EUR/NOK.
Regards,
Dale.
Parabolic SAR Watch List
Tuesday, 21/08/2007
18h47 New York Time
00h47 South African Time
01h47 Bulgarian Time
Valid Parabolic SAR Entry Points should appear tomorrow or the next day on the following pairs:
AUD/CHF
AUD/USD
EUR/AUD
EUR/GBP
EUR/NZD
EUR/RON
EUR/SEK
EUR/ZAR
GBP/AUD
GBP/BGN
GBP/JPY
GBP/NZD
GBP/USD
NZD/CAD
NZD/CHF
NZD/JPY
NZD/USD
USD/RON
USD/SEK
USD/TRY
USD/ZAR
Actually - this particular list should be called the ‘Parabolic SAR Hot List’ i.e. most of these pairs are so ‘hot’ that I’m ALMOST tempted to second guess Parabolic SAR and enter early! DO NOT BE TEMPTED TO DO THIS! If you must - set up an email/SMS alert so that when Parabolic SAR is penetrated sometime between now and tomorrow night you can decide whether or not to open a position!
Regards,
Dale.
Hey Dale Thanks for all the info. Just wondering which site are you getting your SAR signals. I am currently using dailyfx