4hr Parabolic sar working well | Forex Factory

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4hr Parabolic sar working well

  • #1
  • First Post: Apr 10, 2007 3:00pm Apr 10, 2007 3:00pm
After trying various indicators I have been having some success with using the parabolic sar on a 4hr time frame with the gpb/usd. I have set an entry whenever the trend on the indicator changes and then I set a 100 pip stop loss and a take profit of 50 to 100. I also do a stop loss if my 100 pip stop loss wasnt hit but the trend changes. My last 4 trades

1. +121
2. +88
3. - 50
4. Current + 28

Did a little back testing and with the right money management and studying it looks pretty good. Would appreciate some feed back.

Dave
Attached Image (click to enlarge)
Click to Enlarge Name: ricks.jpg Size: 86 KB
  • #2
  • Apr 10, 2007 3:52pm Apr 10, 2007 3:52pm
I'd advise that you do a little bit more research before relying solely on the psar.
  • #3
  • Apr 10, 2007 4:08pm Apr 10, 2007 4:08pm
Thanks for the reply, have you used this indicator before and if so did you use other indicators. While I was looking back for about a year and a half I saw very promising results using the 4hr time frame. Roughly had about 2500 pip gain, of course this was using a take profit level of 50 to 100, there were occasions that pips were left ont the table.
  • #4
  • Apr 10, 2007 4:09pm Apr 10, 2007 4:09pm
The PSAR in itself is totally useless but, filtered along with other elements, some people use it as entry trigger after a pullback in trending scenarios.
  • #5
  • Apr 10, 2007 4:36pm Apr 10, 2007 4:36pm
Thanks for the reply, well i guess i will keep trying this indicator, seems to me that moving averages, macds and all other indicators tend to be useless unless they are utilized in some form or fashion that can generate a consistent signal. Hopefully I can continue the winning trend and minimize my losses.
  • #6
  • Apr 10, 2007 4:44pm Apr 10, 2007 4:44pm
yeah...before using a Live account solely with this strategy please test it in ranging markets .
I think using only this strategy is suicide.
  • #7
  • Apr 10, 2007 4:50pm Apr 10, 2007 4:50pm
Thanks for the reply, i have been using this indicator on a real account, currently up 220 pips. Your right about a ranging market but with the right stop losses I noticed in the back test for a year and a half the winning percentage is very nice and I only trade the gbp/usd.
  • #8
  • Apr 10, 2007 6:16pm Apr 10, 2007 6:16pm
Quoting forexdanofsa
Thanks for the reply, have you used this indicator before and if so did you use other indicators. While I was looking back for about a year and a half I saw very promising results using the 4hr time frame. Roughly had about 2500 pip gain, of course this was using a take profit level of 50 to 100, there were occasions that pips were left ont the table.

I hope you know that you can't rely on that back test result 'cos the psar repaints itself, it changes position on some occassions like when there is a spike. So watchout and tread real carefully with this indicator.

.
  • #9
  • Apr 10, 2007 7:29pm Apr 10, 2007 7:29pm
Thanks for the info, I did not realize it repainted, I have been posting some markers on 5 minute and 1 minute charts to see if it ever repaints I havent seen it do so yet.
  • #10
  • Apr 10, 2007 8:53pm Apr 10, 2007 8:53pm
Currently up 70 pips on my latest trade, will keep informed of progress
  • #11
  • Apr 11, 2007 4:10am Apr 11, 2007 4:10am
The PSAR doesnt repaint itself.
  • #12
  • Apr 11, 2007 6:54am Apr 11, 2007 6:54am
I didnt think it repainted itself, I closed my trade at +100pips
  • #13
  • Apr 11, 2007 10:29am Apr 11, 2007 10:29am
Ok i have added a couple of filters to my parabolic sar indicator, first I added a simple moving average of 14 and then i added an accelerator oscilltator, what I do is wait for a change up in the psar then I confirm the trade with a candle opening over or under the 14 sma I also look at the ao and see it either above zero for long or below for short. I attached an example.
Attached Image (click to enlarge)
Click to Enlarge Name: ricks.jpg Size: 91 KB
  • #14
  • Apr 12, 2007 2:16am Apr 12, 2007 2:16am
Quoting WTB
The PSAR doesnt repaint itself.
It does repaint itself

.
  • #15
  • Apr 12, 2007 5:09am Apr 12, 2007 5:09am
I know it repaints itself during the existing candle but after the candle is formed I have never seen it repaint itself.
  • #16
  • Apr 12, 2007 5:48am Apr 12, 2007 5:48am
PSAR doesn't repaint itself as such but the PSAR dots change location as price moves through it.

I've attached an image marked up with a live trade to try and explain.

I use PSAR as entry order positioning guides, but rarely as a hard-and-fast stop position, I find it works well with a bit of discretion, so won't suit everyone.
Attached Image
  • #17
  • Apr 12, 2007 6:50am Apr 12, 2007 6:50am
It doesn't "repaint" itself during the active candle, it just moves like any other indicator does, be it moving average or stochastic, after the candle has closed it stays where it is, or it has done in the 3 years I have had it on my charts.
  • #18
  • Apr 12, 2007 7:10am Apr 12, 2007 7:10am
Good job forexdanofsa!

Your system looks simple and it allows for discretionaly. I just wanted to chime in (since I'm a PSAR user for a couple of months now - on real account - but use it slightly different way).

PSAR does NOT repaint (like some exotic indicators that float around). Sometimes the term "repaint" is misunderstood. There are indicators that change appearance/color/looks/height whatever DURING the candle formation process. Lets say you have indicator "Colorful Whacko" that turns red if the price movement becomes bearish. You use it on a 30 Min Timeframe. Now, DURING the 30 minutes your candle goes up and down and while its doing "its dance" our Whacko Indicator changes colors like a Chameleon. Once the 30 minutes are over (Candle closes a new one shows up) the Color of the just closed candle STAYS AS IT ITS and will never change again, even if you come back to this chart in 2 months.

Repainting (according to my understanding) is that at the moment my candle closes and my indicator had a Red Color (for example) and I come back a week later (to do some backtesting) - WHAM! the color is now green (bullish) YOU WILL NOT BE ABLE TO SEE ITS ORIGINAL color AT THE VERY MOMENT THE CANDLE CLOSED!

I consider indicators like these amongst the nastier ones (believe me, I've had my share of experience with repainting indicators).

Hope this clarifies on the "repainting issue".

Now. Our friend here, the PSAR DOES NOT REPAINT, according to my definition.

During news times it will position its dot at Candle open and re-position it quite differently if the move goes in the opposite direction.

During normal trading times PSAR is pretty reliable.

Here is my question to forexdanofsa

How do YOU use it? 4 HR candle opens. The dot is UNDER the candle (at open) - do you go LONG at THIS moment? Or do you wait for this candle to finish its formation and buy at the NEXT candles open? (Opposite for SHORTS)?

Not messing around with your system, but maybe we could further work on this technique.

Thanks.

Peter.
  • #19
  • Apr 12, 2007 7:16am Apr 12, 2007 7:16am
Maybe adding a RSI or Stochastic to your chart, would give the added support to the PSAR.

Scrat has had success with using a PSAR and RSI (set to 5) as part of his 15M TF system. http://www.forexfactory.com/showthread.php?t=22875

Spudfyre has a great thread on the use of Stochastics. http://www.forexfactory.com/showthread.php?t=22105

Regards,
Clansman
  • #20
  • Apr 12, 2007 5:14pm Apr 12, 2007 5:14pm
Thanks for the input, yes once the psar changes direction I would wait for the candle to open above the sma and the oscilltator change above 0 and i would go long and visa versa for the short position. Dave
Quoting petercross
Good job forexdanofsa!

Your system looks simple and it allows for discretionaly. I just wanted to chime in (since I'm a PSAR user for a couple of months now - on real account - but use it slightly different way).

PSAR does NOT repaint (like some exotic indicators that float around). Sometimes the term "repaint" is misunderstood. There are indicators that change appearance/color/looks/height whatever DURING the candle formation process. Lets say you have indicator "Colorful Whacko" that turns red if the price movement becomes bearish. You use it on a 30 Min Timeframe. Now, DURING the 30 minutes your candle goes up and down and while its doing "its dance" our Whacko Indicator changes colors like a Chameleon. Once the 30 minutes are over (Candle closes a new one shows up) the Color of the just closed candle STAYS AS IT ITS and will never change again, even if you come back to this chart in 2 months.

Repainting (according to my understanding) is that at the moment my candle closes and my indicator had a Red Color (for example) and I come back a week later (to do some backtesting) - WHAM! the color is now green (bullish) YOU WILL NOT BE ABLE TO SEE ITS ORIGINAL color AT THE VERY MOMENT THE CANDLE CLOSED!

I consider indicators like these amongst the nastier ones (believe me, I've had my share of experience with repainting indicators).

Hope this clarifies on the "repainting issue".

Now. Our friend here, the PSAR DOES NOT REPAINT, according to my definition.

During news times it will position its dot at Candle open and re-position it quite differently if the move goes in the opposite direction.

During normal trading times PSAR is pretty reliable.

Here is my question to forexdanofsa

How do YOU use it? 4 HR candle opens. The dot is UNDER the candle (at open) - do you go LONG at THIS moment? Or do you wait for this candle to finish its formation and buy at the NEXT candles open? (Opposite for SHORTS)?

Not messing around with your system, but maybe we could further work on this technique.

Thanks.

Peter.
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