[QUOTE=dpaterso;35731]The market has taught me humility I can tell you that much.
Another gem Dale. Never forget the market can financially destroy you and you are always just one trade away from self destruction if you lose your discipline or respect for the market. Never turn your back on it!!
Hello all!
I finally think I have a valid point to make! (or a grieve error in my logic to show to the world) :rolleyes:
Okay… Here goes:
I’m looking that the USD/CHF monthly and daily charts.(See attached files. I couldn’t figure out how to make an image so I just made pdf files.)
The monthly chart has been trending down since Jan 2001. So I mapped my fib from the low in Jan 2001 to the most recent low (which was Dec 2004). It appears there was a strong retracement to the 38.2% line on the fibs which (according to the book I’m reading) means that there is a strong chance that this chart will continue trending down to the 1.67% mark (which is about 0.850) over the next several months/years. (NOTE: The 1.27% mark is almost dead on a 1.0000)
Then (since I’m really watching the daily charts) I mapped the fibs and according to the daily chart the market is still trending downward. It retraced to the 61.8% mark (which still indicates a continuation to the 1.67% mark) BUT this 1.67% mark is about 1.0020. (Which to me is pretty close to the 1.0000 of the 1.27% of the monthly chart.)
So… My intention on this is to trail my Stop Loss at the PSAR dots and have my Limit set to 1.0050 (just above the fib point). Maybe too close???
What do you think?
Additionally since I bought the USD and sold the CHF the interest rate differential is 1.50% so I should see a “reorder” pip discount as my position carries over. (Which would be nice to be able to calculate what that discount really is.) 
USD_CHF – Daily.pdf (13.1 KB)
USD_CHF – Monthly.pdf (13.3 KB)
I know this question has been answered here in the 185+ pages…
is it best to manage your account wright after the next day bar is posted?
WOW!!! Someone ACTUALLY went to the trouble to READ the WHOLE thread. That DESERVES an answer of note!!!
I’m not going to ‘quote’ your questions (to save space as I see we are having ‘database problems’ of late on the site - well I’m getting those error messages anyway) but I will answer them ‘by number’.
1 - Yes, all the systems are in the same book i.e. “New Concepts In Technical Trading Systems” by J. Welles Wilder Jnr. I arranged for a discount for babypips.com members so if you email me I will give you the discount code and the link to Mr Wilder’s organisation from where it must be purchased if you wish to receive the discount. All you have to do is put the discount code in when you order and they will discount the book for you (they asked me NOT to put to code anywhere so that it was publicly visible so that’s why the email ‘story’. I promise you faithfully that I get nothing out of the deal and I bought the book a long time before getting in touch with them regarding a discount for babypips.com members. My intention or hope was that more people would buy the book so that we could start some threads here and sort of ‘trade together’ but nobody has shown any interest until now). Mr (new, free) email address is [email protected].
2 - In ‘the book’ (I’ll call it that from now on) Wilder starts out with the ‘Parabolic Time/Price System’ which, of course, includes the calculation and explanation of Parabolic SAR. ‘The book’ also contains the calculations and explanations of all of his other indicators including RSI and ADX. Wilder himself says to not use Parabolic SAR on it’s own but to combine it with ADX for example. Wilder was, in those days, purely a commodities trader and traded things like Soybeans, Pork Bellies, Live Cattle, etc. etc. so all of his indicators (and trading systems) were developed while he was trading these instruments. Now this is not to say that they will NOT work on forex pairs BUT I have spent a whole lot of time analysing these things and I can tell you that things like Soybeans and Coffee and Sugar etc. etc. etc. seem to ‘obey’ ‘the rules’ FAR better than forex pairs i.e. they don’t have the ‘violent moves’ and seem to trend far better and for far longer and then correct just like they are supposed to and then trend again and so on and so forth. I personally ‘love’ the Dow, S&P, and Nasdaq BUT of late they have also been moving pretty ‘violently’ themselves (I know that the correct work is ‘volatility’ but I prefer the word ‘violently’). Soybeans is probably the ‘classic’ example i.e. if you pull up a chart of Soybeans and then overlay Parabolic SAR you’ll see what I mean i.e. none of the ‘huge’ stops at the beginning of the trend and even when Parabolic SAR gives a ‘false’ signal on Soybeans the loss is ‘recoverable’. I must state that it’s not Mr Wilder that says that Parabolic SAR won’t work with forex pairs it’s just my own observation. I do know that he still trades commodities but trades everything else as well now (although he is now trading using ‘The Delta Phenomenon’ which I just cannot get ‘my head around’ and not to mention the costs involved but, maybe one day).
3 - I never came to any worthwhile conclusion with regard to using other indicators to ‘validate’ Parabolic SAR trades. You’ll notice that it was just after my ‘windfall’ which, ironically, was accomplished by using ‘pure’ Parabolic SAR, that I started trying to use other indicators to ‘validate’ Parabolic SAR but I just started losing and losing and this caused me to ‘jump around’ even more and lose some more so I don’t have a definitive answer. As I mentioned previously Wilder himself says to use ADX with Parabolic SAR but, as you ‘picked up’ it just does not seem to ‘cut it’ with forex pairs. I did read somewhere else where someone suggested using Parabolic SAR on the daily charts BUT monitoring ADX on the weekly charts (for forex trading) and this seems to have some merit (I have done some analysis but have not traded with this idea).
4 - ‘Commdolls’ (my ‘bugbears’)!!! I have not had good experience with ‘commdolls’ i.e. every time I ‘throw them into the mix’ I get ‘nailed’. This time around (even with Wilder’s trading systems) I’ve tried with them again and even checked that I’m getting the identical signals on Gold as I’m getting on AUD/USD (for example) and then entering the trade and one of them i.e. either Gold or AUD/USD has gone ‘sour’ for me so I’m now staying away from them (the ‘commdolls’ not the commodities)!!! To honest, though, once it’s happened the first time I’ve ‘walked’ away and that’s not quite the right thing to do. On all occasions I must admit that I always caught either the ‘commdoll’ or the commodity just as the ‘turn’ (or correction) was beginning so it’s reasonable to assume that if I ‘stuck’ with them things would turn out OK. In other words: with the systems I’m trading now (Wilders systems) if Gold is going down and is ‘committed’ to the downtrend then the system will work perfectly on AUD/USD (for example) as well but when I tried them Gold and Oil were still ‘deciding’ whether or not a correction was due so even although the systems were giving me identical signals at the time it stands to reason that neither move was ‘committed’ as yet so one went down and the other continued up slightly and I got stopped out and walked away. I hope that makes sense. From what I can see the move in the forex pair usually comes just after the move in the commodity.
5 - I can only tell you what it costs me to trade the indices and commodities at my brokers. Delta Stock offers Gold, Silver, and Oil and (with the exception of Gold) these can be traded with as little as a dollar or two of margin i.e. 1 lot. A single lot of Gold at the moment can be traded with as little as $9 or so but of course the leverage is much lower on these instruments i.e. not 200:1 more like 100:1 and 50:1 so in order to make any ‘real’ money you either have to buy ‘a whole lot of lots’ or hope that they move like crazy. This IS definitely the way to go if you’re starting out trading these instruments and I’ll explain why I say that later in this paragraph. At Delta Stock you trade the ‘full’ or ‘proper’ index NOT the index futures so 1 lot of Dow will cost you anywhere between $600 or $700 per lot, the Nasdaq slightly less, the S&P still less so you need some serious margin to trade them but the ‘payoff’ is excellent. NOW at GCI you can trade ALL the commodities, metals (including Palladiium, Copper, etc. etc. etc.) as well as most of the world’s index futures BUT be warned: a single lot of ANYTHING at GCI is a minimum of $50 per lot and leverage is 200:1 on ALL instruments. This makes a HUGE difference ESPECIALLY if you don’t know what you’re doing (and needless to say this is where most of any money I used to have has landed up)!!! The difference is HUGE for the simple reason that trading these instruments at GCI can literally make $500 in 30 minutes or lose $500 in 30 minutes ON A $50 LOT for crying out loud because of the high leverage combined with the volatility of instruments like the Dow Futures, Nasdaq 100 Futures, S&P 500 Futures (and of course the DAX 30 Futures which single handedly has contributed to a couple of thousand dollars in losses for me)!!! All I’m saying is ‘be careful’. Trading these instruments with high leverage is very exciting but it can ‘kill you off’ very quickly too.
6 - I came across something interesting which related to Bollinger Bands, RSI, and Parabolic SAR and I just have not had the time to sit down and create the ‘RSIBoll’ indicator (but I may just sit and do it after I’ve finished this reply to you). I did mention this earlier (a few days ago) and it certainly also looks like it has merit. I also ‘like’ EMA’s but, again, I have found that, for some or the other reason, trading with any of these things just does not ‘suit’ the ‘trader’ that I think I am i.e. they’re just too slow and not ‘defined’ enough for me i.e. Wilders systems give me a very ‘fixed’ and ‘rigid’ set of parameters and this is what I have discovered I need. If I don’t have this type of ‘rigid’ structure I will tend to ‘second guess’ the market, hold on to losing positions ‘hoping’ or ‘just let them go a little bit further and if they don’t turn around THEN I will close them and then I’ll end up holding on to them some more)!!! I even ‘managed’ to do this with Parabolic SAR i.e. I stopped trading with stops and started using those ‘mental’ stops and then when a Parabolic SAR stop was ‘reached’ I’d say to myself ‘no - this cant’ be - let me hold on for just a little while longer - it must be a spike’ - and then - a couple of hundred dollars in losses later I would close the position!!! Wilder’s systems tell me EXACTLY which direction to be trading in, where my stops must be, and even more important: WHEN TO TAKE PROFITS AND BE SATISFIED!!! I have since learned that ‘knowing when to take profit’ is as important (if not more so) than knowing where to place stops!!!
I sincerely hope that I have managed to answer all of your questions.
Thanks for the quick reply Dale… and yes you answered all my question :D. So it seems while the commodities and stock indices will follow the system better, they require a lot more margin to trade. As I said before, I’m still kind of “testing” the systems out with forex. I’m using Oanda with very small pip values, although at the moment I have been long on USD/CAD for about 10 days and am up about 220 pips with 15 cent pips so around $33 profit (my beer money). I don’t really want to enter any more trades until I get more money deposited to my account so currently I am making a “watch list” where I just write down where I would have entered a trade and see what happens. I can only risk several hundred dollars right now so my trading is going to have to be with relatively small amounts, I can’t really risk $50 a lot yet, I’m still in college and don’t have a lot of extra money :o. Does this GCI broker have demo accounts? I would like to take a look at them. Also, I am sending you an email shortly for that coupon code for wilder’s book… Thanks again Dale.
Hi,
No problem - my pleasure.
GCI does have demo accounts that are valid for 30 days (but you can keep creating new demo accounts if you wish every 30 days but of course each account is a ‘new account’ so you’d be ‘starting again’ every 30 days). They have Forex and CFD accounts. The Forex accounts have just about every single forex pair ‘known to man’ but the CFD accounts have the ‘major pairs’ and some of the ‘crosses’ and then the good stuff i.e. most of the global Futures indices, metals, and commodities so the CFD accounts are sort of like ‘the best of both worlds’. For the most part the ‘extra’ forex pairs on the Forex accounts are ‘exotics’ so you’re looking at very high yield per pip movement BUT HUMUNGOUS spreads!!! Their website address is easy to find i.e. just search for ‘GCI Trading’ on Google and it pops up just about everywhere.
I’ll check my email shortly. It’s not a big discount but like I said to them when I approached them: if somebody has only got $100 or $200 to ‘start’ then ‘forking out’ $65 or $75 (or whatever it is) is quite high percentage of your capital so they agreed to offer the discount which I thought was very decent of them. Just be aware that the systems in the book need to be worked ‘manually’ and this takes time UNLESS you are able to ‘program’ them into your trading platform (I have been able to do this with Delta’s platform but I have not gotten around to doing it at GCI as yet). What I’m saying is that if you are not able to ‘code’ the systems into your trading platform then you’re going to need something like Microsoft Excel (or some graph paper and a good calculator and a lot of time)!!! When you first get the book you may be a little dissapointed at first and only give it a ‘cursory’ glance and then be upset with me because I told you how wonderful it is BUT I have read that book cover to cover just about every week for the past couple of months and every time I read it I see something that I ‘missed’. You may be ‘sharper’ than me and pick it all up ‘one time’ (I’m getting old you know - or so I’m told) and if you do get it, even if you don’t trade the systems in it, I can assure you that (I think) it’s ‘worth it’s weight in gold’!!! There is so much more to Wilder’s indicators than we (I) knew at first i.e. they are all ‘built in’ to most trading platforms so what we as new traders tend to do is ‘pull them up’ and read a very brief description of what they are and how they work and then try and trade with them and then invariably lose money. If you actually read about them and understand them and ‘pull the calculations apart’ it opens up a whole new world (for me anyway). Put it this way: there must be a very good reason why RSI ‘has stood the test of time’ not to mention Parabolic SAR, the Swing Index, and ADX, and . . . and . . . and . . . (as you no doubt have gathered I am a ‘Wilder Fan’)!!! The fact that ‘the man’ is prepared to give us ‘the time of day’ also means a lot to me i.e. he certainly does not need the money!!!
Edit:
And one other thing: don’t ‘belittle’ your $33 and 220 pips. That’s fantastic. Believe you me that after my losses last year I’m not that much better off than you BUT this time around it’s my percentage that counts NOT the monetary value i.e. if you look at the monetary value of what you’re making it hardly seems worth it BUT if you look at your profit as a percentage of your starting capital for the week or month then that throws a totally different light on the subject. In other words I now say to myself: it does not matter if I’ve only made $100 for the day or for the week of whatever what matters is the fact that that $100 MAY represent a 20% or a 30% gain on my capital for the day or the week or whatever and the logic being that if I added a zero onto my capital then that’s what I WOULD have made with more money and CAN make with more money in the future. See the difference??? If you only have a small amount of capital and look at the monetary value of your profits in the beginning one of two things will happen: either you will get discouraged and ‘throw in the towel’ OR (and this is worse) you will start ‘chasing’ the market i.e. overtrading, taking chances, all in an effort to get that profit figure into something that ‘feels’ like it’s worthwhile. It WILL come (the big money) but you need to be able to CONSISTENTLY make that percentage for now. If you can do this on a consistent basis then you’re ‘home free’ because then it does not matter where you get money from in the future you already know that you are a good trader and can make 20% or 30% return on any amount of capital whether it be $1000 or $1 000 000!!!
Has anybody been watching ‘the loves of my life’ (the Dow, S&P, and Nasdaq)???
IS THIS MASSACRE EVER GOING TO END???
I have 3 position open at present.
1.96155 GBR/USD long
0.74425 EUR/GBR short
1.4753 EUR/USD short
Currently 80 pips in profit. Any suggestions are welcome and if any1 else is still out there trading Parabolic SAR only share your thoughts.
Hello,
GBP/USD - good
EUR/GBP - not sure I’d stay short for long
EUR/USD - again not sure I’d stay short for long
Remember that the Fed is going to cut interest rates - no question - that will - at least temporarily - send the EUR ‘to infinity and beyond’. Seeing that you’re trading using only Parabolic SAR ‘the hope’ is that your trades won’t ‘violently’ stop and reverse on you i.e. it would be nice if you could see the short trades through to their ‘Parabolic SAR end’ and then stop and reverse and hopefully the stop and reverse will just precede the Fed rate hike. That’s in an ‘ideal world’.
[QUOTE=dpaterso;36018]Hello,
GBP/USD - good
EUR/GBP - not sure I’d stay short for long
EUR/USD - again not sure I’d stay short for long
QUOTE]
Yea thats what i was thinking, as i was reading in other forums. I will most likley go long in the morning, and possible buy another lot gbr/usd, as there are high hopes for that pair. Very tempted to put all my eggs in one basket(gbr/usd).
Where there is a big news release or speech do you guys usually see a big spike on the shorter term charts? Bernanke spoke at 7 am (my local time) this morning and it was rated as a “high impact” event on forexfactory.com and I looked at my hourly charts at the 7, 8, and 9 am candles and there was almost nothing. I looked at eur/usd, usd/cad and gbp/usd. Supposedly it was a fairly negative speech as well. Maybe there are only spikes sometimes… I have been trying to pay attention to news releases more so I don’t enter trades at the wrong time, how do you think these news releases affect the daily charts?
OK - well - I finally managed to ‘track down’ a formula for ‘RSI Bollinger Bands’ or ‘RSIBOLL’ and ‘recoded’ it into my Delta platform.
I have attached a daily chart of the Xetra DAX with Parabolic SAR and RSIBOLL.
Take a look and see what you think.
Does it ‘validate’ Parabolic SAR entries? Not sure. Opinions?
From what I gather the basic idea is to enter when RSI breaks out of the ‘Bollinger Bands’ and use Parabolic SAR to see the trade through once that happens i.e. you are NOT entering on the first Parabolic SAR ‘dot’ but on the RSI break out of the ‘Bollinger Bands’ and then using Parabolic SAR ‘as normal’ to set stops and exit the trade at the end.
This needs mentioning though: remember that in this instance they are not really ‘Bollinger Bands’ in the ‘true sense of the word’ i.e. the ‘Bollinger Bands’ here are using the RSI value not the closing price as would be the norm. Of course, on the other hand, what are ‘real’ Bollinger Bands anyway other than moving averages i.e. nothing ‘magical’ or ‘mystical’ about them so why should this ‘combination’ not have merit.
Looks promising but it “failed” when your chart was trending near the end of the timeline (on the right). Can anyone back test this? I don’t know how to back test yet. (Oh, and I’m not complaining that it failed. I just wanted to note that this system might see losses in a tightly trending market. Just mentally preparing myself.)
Now just to make sure I did my “visual” analysis correctly… As I understand it, you are to open a position when RSI breaks out of its Bollinger Bands and then follow the trend till the PSAR changes (I suspect that would mean having Stop Loss at the most recent PSAR dot). Simple to follow. I like it! 
Yep, you’ve pretty much ‘got it’ I think.
This is not my idea but I just thought I’d give it a try (saw it on another thread on babypips.com so I thought I’d ‘steal’ it for us)!!!
Here, go to this website (not the actual link you have to type it into your browser):
forex.gftforex.com/public/item/169157
(I’m sure you know that you have to put the http and the colon and the two forward slashes into your browser in front of the above line and there is no www only the http, colon, forward slash, forward slash and the above link)!!!
It’s explained over there. Looks ‘pretty OK’ to me, not ‘ideal’, but certainly seems to have the ability to ‘filter out’ some bad Parabolic SAR trades.
too good to be true huh but it is!!.. i wish to ask one sort of question… if everybody in this world trade with this system… EVERYBODY!!.. well cant be. cuz no one will be at the opposite side… so meaning… the more people using a same system… the more it wont works… that makes any sense? haha
Anyway… where can i download the BollibandsRSI in one indicator mt4?? please someone upload…this is my first time reading 100pages thread… godd…
GBP/USD - -180 pips, stopped out this morning
EUR/GBP - +80 pips
EUR/USD - +9 pips
All positions closed, no profit made.
Hi,
vxdxm:
Sorry to hear about what happened i.e. turns out we were both wrong.
This, however, is exactly what I was trying to get at in an earlier post i.e. you open a position based on Parabolic SAR, it goes into a nice profit, stays in profit for a few days, maybe even a week, and then the trade goes against you and you either break even or lose money and then you get discouraged and ‘mess up’.
The shame about what happened is that all of those positions will most likely reverse next week. Put it this way: if you got stopped out by Parabolic SAR today you will be getting a stop and reverse signal next week. I would not stop and reverse i.e. this will be a false signal for sure I reckon. Put it this way: if RSI, ADX, and Stochastics are anything to go by then it’s just ‘bad luck’ that you got stopped out today is all.
vicebet:
I don’t know where you can download the RSI Bollinger Bands indicator from i.e. it’s not a ‘standard’ indicator it’s just a combination of two indicators that I ‘usurped’ from another thread on babypips.com because I want to see if it ‘compliments’ Parabolic SAR i.e. ‘filters out the bad trades’ which it would appear it is capable of doing for the most part. I ‘coded’ it into my trading platform and that’s how I got the chart to post. The best I can do for you is give you the formula but then you’d have to ‘code’ it into MT4 yourself OR find is on the Internet somewhere.
I think i am in the same stage at present as you were when you were trading using PSAR only. I am trying to improve by adding other indicators to it, and rather than trading on dailycharts and holding a pair for days. Do trades on hourly charts and only use daily chart to point yourself in the right direction. Ie if daily PSAR telling you to go long, you only go long based on hourly chart and take profits when the hourly PSAR reverses. That way you will have double assurance. But thats why i am thinking, did a sucsessful trade based on that alone this morning, but only took 20 pips. Which wasnt enough to even cover the weekly loss. But i will keep trying and see how get on.
Hi,
Actually, that’s something I forgot to ask you i.e. which timeframes were you trading off? The reason I ask is because if you were trading the daily timeframes you would not have been stopped out by Parabolic SAR today on EUR/GBP and EUR/USD and you were trading contrary to Parabolic SAR on GBP/USD??? Not that it would have mattered because I reckon that Parabolic SAR is giving the incorrect reversal signals on EUR/GBP and EUR/USD (for the short term i.e. until the end of the month anyway).
One other thing you might want to ‘try’ with Parabolic SAR is to NOT enter when you get the first dot but wait for a retractment because I notice (noticed?) that more often than not after the first Parabolic SAR entry signal is given the price retracts (sometimes for a couple of days contrary to Parabolic SAR after the entry signal) and then starts going in the direction as indicated by Parabolic SAR (which I suspect is exactly what is going to happen with EUR/GBP and EUR/USD this month).
I closed EUR/GBP and EUR/USD myself, as didnt want to leave it running over the weekend.
