Parabolic SAR - that's all!

Trading Systems Free Forex Trading Systems
2018

Once again, thanks for your LONG and DETAILED reply. :slight_smile:
But still…

With parabolic sar, if you apply your SL on the dots indicated by the parabolic sar, as I mentioned above, 200 pip is the “normal” situation. Not 100 as you gave on your example.
I’ve seen other cases where you parabolic dot is, sometimes, 300… or even 500 pips!!! :eek: distance

So I really think is quite dificult (not to say impossible) for you to apply your SL on the dots, while at the same time keep your risk =< 2%.

[B]btw, when I talk about risk I’m thinking like this:[/B]
If I have a 2.000 USD account and I want to risk 2% of my capital, I will put my SL 40 pips (= 40 USD) away from my open price.
I believe I’m correct here, no ?

It seems that even with a 5.000 USD account you only have a buffer of 100 pips (again the 2% rule here) , not flexible enough if you want to put your SL on the parabolic dots.

I’m also a newbie… :smiley:

2019

Ok i am almost done here.

Maybe one final word about forex. Guys do forex as a hobby when you have $1 000 to waste and you don’t know what to spend it on. As for opening $5 000 -$10 000 accounts please don’t do it. Please don’t think you are gonna make a living trading forex. It is not gonna happen. You might win a $1 000 the one week, only to give it back the next week.

If you google the top 50 richest people in the world you won’t find one forex trader among them. In fact I have never talked to, or seen a rich forex trader. Yes i have heard lots of urban legends about 22 year olds driving around in ferraris, or traders who turned $1 000 into $100 000 in a week, but then again I have also heard a lot of rumors about Big Foot and the Lochness Monster.

I drawn my conclusion once i saw every single respectable trader (Rob Booker, Jerry Furst, Ed Ponsi, Tony Juste, Adam Rosen, Ian Copsey, Kathy Lien, Boris Schlossberg,) offering mentoring at a monthly rate. I mean these are the guys that are the experts. They have all written forex best sellers. And they are guest speakers at forex conferences. Then I wondered why they would rather spend 1-4 hours a day teaching forex instead of using that time to make millions on the forex markets? The answer is very simple. Forex is a very volatile market. Big dogs like financial institutions and hedge funds manipulate the forex market. We as little guys have no chance to be succesful in forex. The only way they make constant money is by getting people to sign up for their mentoring courses.

Why else would there be plenty of brokers offering you the oppertunity to open a $50 - $100 000 account if you could make millions sitting on a beach in the caribbean sipping on a marguerita and smoking a cigar while closing out winning trades?

I remember when i first started trading forex i called my brokers after some serious slippage took place. He then explained to me that i was trading an exotic currency that takes a while to get quoted etc…etc… But i will never forget his last words…“Sir there is no easy money to be made in forex.” After 3 years of trading i realise he was right. There is no easy money to be made in forex. Just easy money to be lost. Isn’t that why 95% of all traders lose their accounts?

So what am i trying to say? Trade forex as a hobby. Open a $1 000 account and expect to lose it. Cause sooner or later you will loose it. Play around on the forex market. It keeps you busy and is fun. Almost as much fun as online poker…lol

And if you still don’t believe me. Google Jesse Livingmore. He said:“Nobody can beat the markets over a long period of time. Sooner or later you will give back all the money the markets gave you.”

Peace and happy trading. But dont take forex too serious…lol

2020

The PSAR rules are a bit flexible, but unfortunately you may get stopped out of a few trades with a low SL. With that said, Trade what you are comfortable trading. If you start getting stopped out often, and notice the trend hadnt changed, this may not be the method for you. Dont let the method force you into more risk, if you are risk adverse, find (or develop) a method at fits your style.

Trading PSAR have wild ebs and flows, so the more margin and capital you have, the better.

Oh, I am a newbie too, so there are probably old timers who can chime in with better advice.

2021

Chuck,

I’m really confused now. You show a system and state that it “consistently” makes 50-100 pips and yet your last post states that trading FOREX is consistently a losing deal. Which is it? Can you make money in FOREX or is it truly a zero sum game (actually a negative sum game given the spread).

I was actually about to try your V-Candle system but now I’m a bit shaken by your comments.

I will say that I agree with you that MOST people will lose money or else how could that occasional big winner get any money. I guess what I’m saying is that in any trade money is being exchanged from one person to another. HOWEVER, I would think that with a consistent trading system one should be able to be the profitable trader (over the long run) over the unprepared/emotional/non-plan-following trader. Maybe that is what you are trying to say?

Edit: If it is truly a game then why spend real money on it? Why not just open a demo account and trade just that?

2022

I’d say you’ve got to wait for the right signal (taking money management into account too). Therefore the 200-500 pip PSAR Stop Loss signal opportunities are just not for you. Don’t regret the trades that you can’t/shouldn’t take. Be diligent to your trading system and only select those trades that fit your entire trading system, not just the technical indicators.

2023

Folks, not to post like a complete idiot but could one of you veterans reply my last post?
Again, thank you in advance.

2024

Hi Everyone,

I was very sad to see my 500 bucks remaining 321l.

I went Short in EURUSD as the signal of the PSAR on the Daily chart and my stop loss was set to 1.4780 as the position of the PSAR. I was happy i set the lot size to 0.1 i.e 1 pip = 1 usd, I would have got a margin call now.

Any advice from you guys is welcome.

Hope to start on the right side tommorow.

2025

Have to admit thats the one that f*cked me up also, today went long with gbp/jpy, and currently 130 pips up. but still a bit away from recovering my losses. That was a big loss to me and really got me down :frowning:

2026

I would suggest to read the first 10 pages. I use major pairs, dont trade exotic currencys as its very hard to find feedback on them.

2027

Tell me about it! Yesterday I was setting up trades JUST based on my technical indicators and I setup a trade on the AUD/THB. OUCH! Not only was my spread something like 100 pips but 1 pip cost something like $32.05. DOH! Good thing I’m learning on a demo account!

2028

Hey folks,

daxm:

I see you’re doing a great job of ‘fielding’ here. Well done. I can also see from your answers that you’ve been reading a lot!!! Again, well done!!! How are those books???

Tony, you ‘swine’: you beat me!!! So what happened when you got to 1000??? Did you at least get a prize or something???

One or two things:

First: when someone posts that they can’t read through the pages of this thread then don’t expect an answer from anyone (you’re lucky that daxm is replying to these messages at the moment I’ll tell you). You’re looking for a ‘quick fix’ and there is not one. The information and ‘real world’ experiences that have been shared by everyone on this thread is far more valuable than any ‘system’ that may have been posted here. Alas, unfortuanately, when you’ve wiped out your first account, it is then and only then that the reading will start. Pity.

Second:

This ‘thing’ about HUGE Parabolic SAR stop losses.

I agree and there is only two ways to do it I reckon:

1 - As daxm says: have a HUGE account so that ANY stop that Parabolic SAR ‘presents’ to you is within your money management rules e.g. 1% or 2% or whatever (probably the best method).

2 - My suggestion of a couple of days ago i.e. instead of using the Parabolic SAR stops you open a position as indicated by Parabolic SAR BUT your initial stop is set to within the parameters of your money management rules. On each and evey successive Parabolic SAR dot you open a position in the same direction based on the same money management rules and keep repeating this process until the Parabolic SAR stop and reverse point is reached. A ‘variation’ of this would be to open your initial position and your initial stop is set within your money mangement rules. If that position goes in your favour you open another new position when you get the next Parabolic SAR dot and the stop for this newly opened position is set to within your money management rules BUT the stop for your initial position is now set (adjusted) to the current stop as dictated by Parabolic SAR. Again this process gets repeated until the Parabolic SAR stop and reverse point. What is happening here is that every position that goes in your favour is creating a ‘profit cushion’ so that any other trade that goes against you will (hopefully for the most part) be offset by the preceding profitable positions and what’s more the loss on each and every newly opened position is kept to within your money management rules.

Like I also did say previously when I first posted the above ‘idea’: I am NOT trading this ‘system’ I’m just giving you ideas. You need to check this out for yourself on a demo account (or a mini / micro account which is preferable).

Do not waste your time on any timeframes shorter than the daily with this indicator. There is too much ‘market noise’ etc. and you will get stopped out for nothing.

‘Chucky’:

Oh man, I SURE HOPE that you’re wrong my man, about making a living out of trading (not necessarily forex) otherwise I’m sure going to be ‘up the river without a paddle’!!!

On a serious note: there have been very many times when I have wondered the same thing and for the most part I would say that you are right BUT having said that: if you can be consistent i.e. smaller profits more often and money management I do think it is possible. Since I have stopped ‘fu*king around’ and are ‘sticking’ with ‘systems’ that I have faith in and not ‘wavering’ my (very small) profits are consistent and have been for about a month or so. Too early to tell? I don’t have that answer but you can be sure that I’ll keep you posted either way!!! Put it this way: what’s happening now is a ‘very far cry’ from last year ‘fiasco’ although the ‘stakes’ are smaller at present which is unfortuante.

2029

Another place to set a stop loss, as I’ve read, is 1 ATR (Average True Range) from your open position. I’ve been using this since it take into account the recent price ranges. I think it is more “in tune” with the recent market activity.

2030

Good point Daxm! Which is it? Although Chuck also has a point.

I think its people with the notion that thay can come along with 2000 dollars or so and think that they can turn this 2000 into millions through trading FOREX with some systems that they picked up online and minimum effort. This is simply not going to happen (or extremly unlikely at best).

However, if you have a good system, discipline, proper money management and carry out your own research and studying by reading books etc (and by that, I include THE WHOLE THREAD that is full of valuable info), it is surely possible to obtain a good and steady annual return. Lets say 15-20% per year as a starting target.

If you can achieve that, then if you have the funds, you can increase your account balance periodically so that your annual return is giving you a good income. With compounding etc, and adding of additional funds, I think it is possible to work towards this goal.

But,a mini account, turn over 100% or 1000% per year…Ferrari by next xams… I dont think so!

2031

I have done this as well… Or sometimes I have used 2x ATR. If the SAR dot is so far away, then a broker like OANDA where you can tune your trade size so that the pip value suits your money management may be what is needed.

2032

Hello,

I have looked at the 1 or 2 x ATR but on some instruments (GBP/JPY that could STILL be a HUGE stop).

What I THINK my ‘Parabolic SAR compounding’ idea might accomplish is to let the profitable trades run and cut the losing ones early. Not sure.

I am also going to work on an idea that ‘came to me in the night’:

I cannot finish this message because of ANOTHER POWER FAILURE IN MY NOW ‘THIRD WORLD COUNTRY’)!!! FIFA would be well advised to start looking at the ‘backup country’ for the 2010 world cup I can tell you!!!

(OK - I’m back - but I will continue this message in a new post. I am, however, leaving the above comment for the simple reason that I think that the world should know what’s going on here).

Some VERY good posts this morning by the way Boca!!! Great.

2033

So guess what Dale? I went to a local used book store yesterday to see if by chance they had wilder’s book. I wasn’t too confident they would have it, but the lady working there showed me the investing area, and they had quite a few older books. After looking around for a few minutes, I spotted a copy of New Concepts in Technical Trading Systems! It was in pretty good shape, no pages ripped or missing, and I only paid $10 for it :smiley: I haven’t got to read too much of it yet because of school but this weekend hopefully I can sit down and get into it. Anyway, I thought I would give a brief history of my trading record so far…

USD/CAD long +296 pips (stopped out by parabolic sar on monday)
USD/CHF long -195 pips (hit my manual stop loss after the fed rate cut :mad: )
AUD/JPY short +27 pips (manually closed, should have never taken trade in first place)

currently open positions:
USD/CAD short +190 pips
CAD/JPY long +319 pips
GBP/CHF long +62 pips (just opened several hrs ago)
GBP/JPY long +88 pips (just opened several hrs ago)

I am trading the daily charts using parabolic sar “filtered” by adx. If the adx is below 20 or below 30 or so and heading down I won’t enter a trade. Also, when +DI is above -DI, I only will listen to psar signals to go long, when -DI is above +DI, only to go short. The last part about +DI and -DI isn’t a rigid rule though, if it looks like they are going to cross over soon I will go ahead and enter a trade if everything else looks good. It’s mainly for during a trade, if I get a stop and reverse signal, it does a good job at filtering out false reversals. Also, for my stop loss I use a manually set number which varies depending on the volatility of the pair, usually an even number though, like 1.9600 for gpb/usd or 1.0200 for usd/cad. It’s never as wide as the psar. Once the psar dots move enough to lock in profit, then I switch to that for the stop loss. Anyway, that’s what I’ve been using lately, after I read the book we’ll see what happens…

2034

OK, I’m back again (let’s see how long the power stays on now. It’s been so bad in the past couple of days that my notebook and UPS’s on my workstations don’t even have enough time to charge up)!!!

chirules54:

I’m so glad you bought the book (and for $10 at that)!!! Believe me you will not be sorry (and you’ll make that $10 back on your first trade I assure you). Don’t be ‘put off’ because it’s ‘old’. The beauty of the trading systems in that book is that they still apply to the markets (evidently) and they are really and truly ‘technical brilliance’ in my opinion. Do yourself a favour and take a particular look at ‘The Volatility System’ and ‘The Swing Index System’!!! Sheer ‘technical brilliance’!!! I have been using ‘The Trend Balance Point System’ for the past couple of weeks (month or so???) with excellent results. The only problem with this system is the HUGE stops (which I have spoken about previously on the thread. These stops have ‘caught’ me badly on occasion unfortuanately). I have ‘programmed’ the others into my Delta trading platform but I’m now waiting very patiently to get some entry points (for initial testing purposes).

Actually, while I’m on the ‘Wilder’ subject, and now that one or two people have bought the book, we need to start thinking of how we can start sharing ideas and trades I think. Unfortuantely it has to be in a way that the systems themselves are not detailed on the threads (for copyright reasons AND, more importantly, ‘doing the right thing’ by Mr Wilder). Ideas???

Anyway, like I said earlier, this ‘came to me in the night’:

‘Yet another way to trade Parabolic SAR without getting the sh*t kicked out of your capital’!!!

I have just written an ‘indicator’ that gives you a moving average (period of your choice) of the difference between the current value of Parabolic SAR and the opening price of the corresponding candle. ‘What on earth for?’ you ask!!! Think about this: when you get a new Parabolic SAR entry point you place a market order to go long or short right? Now if you have a good look at Parabolic SAR VERY RARELY does the price just continue to shoot up in your direction from the ‘get go’ i.e. there is normally ALWAYS a retractment that lasts a day or two AND THIS is where you get ‘nailed’ i.e. if that retractment is big enough you’re going to get stopped out at what is sometimes a HUMUNGOUS LOSS OR, at best case, you are now going to carry a losing position for a few days tying up capital. NOW: the ‘idea’ of my (let’s call it ‘Parabolic SAR MA’) indicator is to tell you what the average distance is between the opening price of a candle and the corresponding Parabolic SAR dot. The ‘idea’ here is that instead of immediately placing a market order when you get the Parabolic SAR entry signal you place a limit buy or sell order AT THE CLOSING PRICE OF THE PREVIOUS CANDLE LESS OR PLUS THE CURRENT VALUE OF THE (MY) PARABOLIC SAR MA!!! This accomplishes two things: 1) there is better than average chance that you won’t get into a trade that is initially ‘bad’ and 2) if the price retracts and the limit order is executed the position is opened A HELL OF A LOT CLOSER TO THE PARABOLIC SAR STOP so your potential loss is decreased if the entire trade goes against you. Thinking about it now you could probably also use 1 or 2 x ATR to accomplish the same thing i.e. instead of placing a market order to ‘get in’ you place a limit buy or sell order AT THE CLOSING PRICE OF THE PREVIOUS CANDLE LESS OR PLUS 1 OR 2 X THE CURRENT ATR VALUE.

Check it out and give feeback if you’re ‘in the mood’!!!

2035

994 Dale, you are getting close to joining me! I must admit I am not often persuaded these days to look at other approaches but your enthusiasm for Wilder has led me to place an order with Amazon today. I am not sure that there are any copyright issues to be honest. These matters are in the public domain pure and simple. I would believe that it would be quite acceptable to start a thread specifically aimed at trading his models and (if necessary) adapting them in the light of experience. I am sure bpips mods would shut it down pretty quick if they felt we were violating some kind of copyright law. I would certainly be interested in contributing to such a thread if its a fraction as good as you think it is (once I know something about it of course)

2036

995 and counting (you still did not tell me if you won a prize)!!!

OK well, for anyone else interested in buying ‘New Concepts In Technical Trading Systems’:

As you know (if you BOTHERED to read the thread AND IT WAS NOT TOO MUCH TROUBLE) I arranged a $20 discount on the book, for any babypips.com members, with Mr Wilder’s organisation. The arrangement was to NOT make the discount code ‘publicly viewable’ so if you send me an email to [email protected] or a PM I will send you the code (this done only so that they know that it is a ‘genuine member’ of babypips.com purchasing the book and not just a ‘casual browser’ looking to ‘save a buck or two’).

Again: I DO NOT GET ANYTHING OUT OF THIS. I bought the book LONG before I arranged the discount from Amazon. I arranged this ‘deal’ purely to save ‘new traders’ a little bit of money (the $65 retail price excluding shipping is quite a ‘whack’ if you only have $500 to start with) and I was also hoping that we could start some threads ‘dedicated’ to the trading systems in the book and share thoughts, ideas, trades, etc. etc. etc. not to mention the fact that yes, the book is ‘old’ and so are the trading systems (although, like I say, they DO work) so maybe we could sort of ‘tweak’ these systems or ‘update’ them IF NEEDS BE to suit today’s market. See where I was ‘trying to go’ with this i.e. ‘1000 heads is better than 1’!!!

As far as copyright and ‘detailing the systems’ on a thread is concerned I would not want any involvement with it if it’s done that way. I believe that ‘the man’ like anyone else is entitled to fair payment for his work (believe me you will ‘make’ the cost of the book within your first trade or two). I’m sure he does not need the money but it’s ‘the right thing to do’ in my opinion. I have checked, Tony, on the Internet and I only come across one site where the IDEA and LOGIC of one or two of the trading systems is detailed NOT the ACTUAL ‘nitty gritty’ of the systems. Put it this way: if you’re lucky enough to ‘find’ copies of the actual systems on the Internet and then contribute to the threads then there is nothing I can do about it. Having said that: I do believe that anyone that does not buy the book for $40 or $45 (I forget which) and then want’s to ‘piggyback’ off the threads is the very same type of person who is looking for the ‘quick fix’ and will inevitably ‘see their ar*e’ so it’s probably of little consequence. Aside from the trading systems in the book there are ‘in depth’ explanations and calculations of HIS indicators i.e. RSI, ADX, CSI, and tips from ‘the man’ on how he traded and lots of other little ‘tidbits’ that you’re not going to get off of a thread.

Let me put it this way: I had one or two questions that related to something in the book (well not so much the book but more what his opinion was on a ‘Sunday’ candle or bar and what to do with it if trading his systems) and he replied to me personally. Now that to me says a lot i.e. the book is sold with NO support and he was still prepared to answer my questions!!!

I know I’m on a bit of a ‘Wilder’ mission here BUT for all of you who say that ‘indicators’ are useless I must just tell you that yes, for short term trading, I would agree with you, but there must be a very valid reason why most analysts TO THIS DAY refer to Mr Wilder’s RSI when making long term trading decisions!!! Go figure!!! I NEVER see any one of them referring to Bill William’s Alligator or Awesome Oscillator!!! As a matter of fact I NEVER even hear them mentioning a candlestick or bar. What you DO hear is ‘RSI’, Stochastics’, and yes, trend lines and MA’s. That HAS GOT to account for something!!!

NOW (and this is where it’s going to get REALLY good):

I have just become an IB for Delta Stock. Now while I know that I could not ordinarily ‘punt’ a broker here for personal gain I have another type of ‘deal’ and that is this:

If you open a trading account with Delta Stock via me I will (at no charge) actually email you all the indicators that I have created for the trading systems in the book that I have programmed into Delta Stock’s platform. Fair deal???

2037

I became an FX-Men Honarary Member rather than a Superior Master Contributor. Based on your Wilder views then what do you propose regarding a thread to tackle this without causing you some discomfort? If you do start a thread how can it discuss matters without in fact revealing the methodology? Or are you now saying that its a non starter for you?