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SAR Method on 4hr Charts

  • #121
  • Nov 18, 2013 2:58pm Nov 18, 2013 2:58pm
Ok guys,

Would be very grateful for you assistance please. Where I am still not clear is this. When I take the very first trade (let say I went long). where should I place the SAR to start with? Thanks
  • #122
  • Nov 18, 2013 4:16pm Nov 18, 2013 4:16pm
Well Buff may be gone out to the Outback or somewhere so I will answer. Look for the last swing point to the left Dan. If that is very far for the time frame you are using look for a closer support or resistance level. Put your stop behind there. The latter is a little riskier.
This method being a trend follower gets beat up naturally during choppy markets. I believe it can win but attention to money management is critical to withstand drawdowns psychologically. Good luck.
  • #123
  • Nov 18, 2013 4:21pm Nov 18, 2013 4:21pm
Quoting mikeh3855
Well Buff may be gone out to the Outback or somewhere so I will answer. Look for the last swing point to the left Dan. If that is very far for the time frame you are using look for a closer support or resistance level. Put your stop behind there. The latter is a little riskier. This method being a trend follower gets beat up naturally during choppy markets. I believe it can win but attention to money management is critical to withstand drawdowns psychologically. Good luck.
Many many thanks.
  • #124
  • Nov 19, 2013 3:52am Nov 19, 2013 3:52am
Icannot see your video,whats the problem?
  • #125
  • Edited 9:37pm Nov 20, 2013 8:54pm | Edited 9:37pm
I had a go at making an EA based on the SAR method, as I understand it.
Unfortunately, I too get cut to pieces when the market is ranging.

Improvement suggestions welcome, or if you have any questions about using the EA, please ask.
Attached File(s)
File Type: mq4 Stop and Reverse EA.mq4   31 KB | 367 downloads
  • #126
  • Nov 23, 2013 2:20pm Nov 23, 2013 2:20pm
Quoting boomza
I had a go at making an EA based on the SAR method, as I understand it. Unfortunately, I too get cut to pieces when the market is ranging. Improvement suggestions welcome, or if you have any questions about using the EA, please ask. {file}
As you have noted, this method is a trend following method and as such requires a bit of discretion when met with ranging markets...the question is along these lines: How big is the range? which time frame will absorb it best? how big do we want to run our stops.

It is my sincere belief that automating this method is completely unnecessary. If you want to be "always in" the market select a larger time frame like 4 hrs or larger...my favorite is a 6 hr candle. If you want to be in and out during a single day or session use a small time frame, like 5 min or 15 min. (Even 1 min works well if you are nimble enough). But there come those periods in ALL time frames where price ranges...you will never know in advance when they come and you will never know how long they will last. Your only choice is to use discretion and either take profit or stay out. A computer program will never be able to do this...at least not one that MT4 will use.

To what end would you want to automate in the first place? (1) So you don't have be stuck in front of the screen? (use a longer time frame and just check it every 8-12 hrs)... (2) So you can profit from each and every little twist in the market? (use a small time frame and pick your favorite session - Asia, London, US).

This method is so simple and straight forward I cannot see any advantage in complicating it with automation...In fact I think it will ruin it...just exercise a little pre-planning and decision making and it will do fine. I have been using this on Gold and AUD/USD...and since Sept. I have gained well over 1500 pip with a win rate of about 65-70%...further, I have adapted it for day trading the mini dow and have a win rate of 75% and have made yet another 1500 pips by just being patient and waiting for the next trend to break and run.

Even if someone was to offer to automate this for me I would not accept it...to my way of thinking there is no computer that can duplicate my train of thought in each and every moment of the market. I prefer to trust my instincts...and truly feel the method works best in this manner.

Instead of dedicating so much time and effort to programming use that same time and effort in trading this method and you will have your financial goals secured far more rapidly.
  • #127
  • Nov 23, 2013 9:06pm Nov 23, 2013 9:06pm
Quoting gspajon
{quote} As you have noted, this method is a trend following method and as such requires a bit of discretion when met with ranging markets...the question is along these lines: How big is the range? which time frame will absorb it best? how big do we want to run our stops. It is my sincere belief that automating this method is completely unnecessary. If you want to be "always in" the market select a larger time frame like 4 hrs or larger...my favorite is a 6 hr candle. If you want to be in and out during a single day or session use a small time frame,...
Well said. Very true.
  • #128
  • Nov 25, 2013 10:46am Nov 25, 2013 10:46am
Quoting gspajon
{quote} As you have noted, this method is a trend following method and as such requires a bit of discretion when met with ranging markets...the question is along these lines: How big is the range? which time frame will absorb it best? how big do we want to run our stops. It is my sincere belief that automating this method is completely unnecessary. If you want to be "always in" the market select a larger time frame like 4 hrs or larger...my favorite is a 6 hr candle. If you want to be in and out during a single day or session use a small time frame,...
Hi
Could you explain your adaptation of this method for intraday trading.
Regards
  • #129
  • Nov 25, 2013 12:10pm Nov 25, 2013 12:10pm
Quoting howard
{quote} Hi Could you explain your adaptation of this method for intraday trading.
it is very simple. I use the method as described at the beginning of this thread but use it on a 5 min chart. Approximately 30 min before the session I look at the charts and find the last trend and mark it as if I was trading that trend. Then I set up the stop (buy stop or sell stop) to get me into the next reversal.

At that point I follow the method exactly except that I set a limit of 50 pips on each trade. If the price reaches my limit I'm done for that session (day). If price reverses, I stop and reverse as described in this thread. I move the SAR exactly as done on a 4 hr chart or a daily chart or an hourly chart...locking in pips as the trend progresses.

The only change I make to day trade is a limit so that there is a finite trade that will end the day. While I don't get 50 pips every day I get that number about 75% of the time...my personal average - considering all wins and losses is about 30 pips/trade.

Its not complicated at all. Resist the urge to add more "rules" or make this method more complicated than it has to be...it works amazingly well just as it is. Using this method and a little self discipline I have improved my trading results by 50%. I'm sure you can do better than this...it just isn't that hard.
  • #130
  • Nov 25, 2013 2:13pm Nov 25, 2013 2:13pm
gspajon, what pair do you trade on 5 min using SAR? I used to experiment on 15 min charts GU and EJ since start of November. What I can say is that this method, like 4H trading, strongly needs intraday movement in one direction, i.e. trend, otherwise you get whipsawed by the market and get out with losses. I too set my limit of losses of 50 pips per day. So far I didn't get amazing results like you did. I try both 4H and 15M trading. Most important thing is in both timeframes is to catch a nice movement but before there can be some losses so MM is essential. I will keep testing further.
I wonder how traders managed their 15M trades like Buff earlier mentioned in this thread. Would be usefule to know. Buff, if you happen to read this, please could you elaborate more on intraday trading using SAR method?
  • #131
  • Nov 25, 2013 3:54pm Nov 25, 2013 3:54pm
Quoting SergFx
gspajon, what pair do you trade on 5 min using SAR? I used to experiment on 15 min charts GU and EJ since start of November. What I can say is that this method, like 4H trading, strongly needs intraday movement in one direction, i.e. trend, otherwise you get whipsawed by the market and get out with losses. I too set my limit of losses of 50 pips per day. So far I didn't get amazing results like you did. I try both 4H and 15M trading. Most important thing is in both timeframes is to catch a nice movement but before there can be some losses so MM...
As I stated in previous posts, I daytrade the dow e-mini futures. Using the 5 min charts allow me to catch quick moves or moves that take all session to trend. While it is vulnerable to whipsaws it is no more vulnerable than any other time frame. All charts have whipsaws and ranges...thus is the nature of trading. I chose the dow because it starts on the NY open and allows me to trade during "normal" hours as I am in the US. I suspect this would work as well with EUR pairs during the London session...for me that is the middle of the night and I refuse to be a mole.
  • #132
  • Nov 25, 2013 5:55pm Nov 25, 2013 5:55pm
Quoting gspajon
{quote} it is very simple. I use the method as described at the beginning of this thread but use it on a 5 min chart. Approximately 30 min before the session I look at the charts and find the last trend and mark it as if I was trading that trend. Then I set up the stop (buy stop or sell stop) to get me into the next reversal. At that point I follow the method exactly except that I set a limit of 50 pips on each trade. If the price reaches my limit I'm done for that session (day). If price reverses, I stop and reverse as described in this thread....
There you go. A simple effective day trader's method. I don't trade all day but this shows the universal effectiveness of this method. Nice work gspajon.

Personally I have moved to just the GBPUSD on the 4 hr chart. Previously I was using three pairs but through my backtesting GBPUSD far outperformed the others, and I was overleveraging with three pairs. I am risking 5% per trade. I feel there are many possibilities with this method for traders to customize to thier liking.

Mike
  • #133
  • Nov 26, 2013 8:29am Nov 26, 2013 8:29am
Quoting mikeh3855
{quote} There you go. A simple effective day trader's method. I don't trade all day but this shows the universal effectiveness of this method. Nice work gspajon. Personally I have moved to just the GBPUSD on the 4 hr chart. Previously I was using three pairs but through my backtesting GBPUSD far outperformed the others, and I was overleveraging with three pairs. I am risking 5% per trade. I feel there are many possibilities with this method for traders to customize to thier liking. Mike
Hi

The 5% risk is related to the position sizing of your initial entry, is that right?
Because after that due to the SAR effect the position size remains constant and therefore the risk might be above or below 5%
Regards
  • #134
  • Nov 26, 2013 8:50am Nov 26, 2013 8:50am
Yes the position size is based on initial stop loss placement. Stop is x number of pips away from entry, contract size is adusted to 5%. The risk would only reduce as the SAR moves closer to the entry point. Since the SAR is never moved further from the entry point the risk would never increase.
Be careful with a 5 percent risk. It is considered high in this business. I have no idea how many newbies are reading this.
  • #135
  • Dec 20, 2013 6:22pm Dec 20, 2013 6:22pm
Just got home last night and catching up with my trading. Good to see that some of you have taken it to a day trading level. I'd be interested in hearing about any results achieved. And thanks boomza for producing the EA based on this method. I'll be checking that out further. Cheers.
JAGfx
  • #136
  • Dec 21, 2013 12:03pm Dec 21, 2013 12:03pm
Quoting buff
Just got home last night and catching up with my trading. Good to see that some of you have taken it to a day trading level. I'd be interested in hearing about any results achieved. And thanks boomza for producing the EA based on this method. I'll be checking that out further. Cheers.
Here are some of my day trading stats done on the DOW e-mini. These are live in the market trades...not theoretical and include 101 trades made since the end of September:
win rate = 69.57%; average winner (using 1 e mini contract) = $202.98; average loser = $61.07; RRR = 3.32:1; expectancy per trade = $159.79; Total P/L on account ($15,000) = 74.38%; Average risk = 18 pip ($94.50); Biggest risk = 36 pips ($181.20); average time in trade (winners) 1hr-20min; average time in trade (losers) 43 min; Total cash ratio = 8.19:1

Most of the above stats speak for themselves and it is clear that this is an extremely valuable method that lends itself to any style of trading you care to use. The magic number for me has always been the cash ratio. I have been able to pull out $8 for every $1 I lose, therefore even though the win rate has come down since I first started using this method (80% wins now at 70%)...the fact that I can pull out 8 times what I lose is very significant.

In conclusion I would like to leave you with this equity curve as seen below. This method's simplicity and ease of use leaves many people thinking, "that's IT?" There is no magic formula or stupid indicators...it is pure price action at its best. It neither predicts nor anticipates any future movement, instead it reacts to the current price action and as such is almost always on the right side of the long trend runs. there is no "market study" or "analysis" needed. Staying disciplined (as always) is the challenge as one never knows from one candle to the next when the next trend will come or when the next range will start. But it should be obvious to anyone reading this thread that this method is powerful and worthy of use.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 34 KB
  • #137
  • Dec 21, 2013 8:31pm Dec 21, 2013 8:31pm
gspajon,

Thanks for the detailed update. I'm not really familiar with trading the Dow e-mini, but the figures I do understand. Mate, that is pretty impressive. Your win rate at approx 70% is great, but I like the risk to reward numbers. You are on to something here and that equity curve speaks for itself. I do have a friend that use to trade this instrument so I might pump him for a bit of info on it. But I guess you could still do this with trading Forex, just by picking say one pair and a particular session. You are right when you mention discipline. That's what it is all about. Thanks again for the info. Cheers.
JAGfx
  • #138
  • Dec 21, 2013 11:42pm Dec 21, 2013 11:42pm
Nothing to do with this method, but more of a Christmas gift to anyone that has read this thread. One of my EAs I had built called SMSF. Aussies will know what that stands for. Just use the default settings of 12,26,9 & 1,8,3. I would suggest you look at the EUR/AUD 4hr chart. Use a time filter of 60 and only use a MA of 960 (type 3). Select false for break even and trailing stop. Leave Friday close time blank. Use a stop of 110 and a take profit of 210. That should be enough to get you interested. I do all my testing on a $10K account at 0.1 lot. Any questions, feel free to contact me. Cheers. Jim
Attached File(s)
File Type: mq4 SMSF 131113.mq4   15 KB | 538 downloads
File Type: ex4 QQE and MACD dual signal(1).ex4   47 KB | 483 downloads
File Type: ex4 MACD_Platinum.ex4   25 KB | 439 downloads
File Type: ex4 QQE ADV.ex4   4 KB | 437 downloads
JAGfx
  • #139
  • Dec 22, 2013 12:39pm Dec 22, 2013 12:39pm
Quoting gspajon
{quote} Here are some of my day trading stats done on the DOW e-mini. These are live in the market trades...not theoretical and include 101 trades made since the end of September: win rate = 69.57%; average winner (using 1 e mini contract) = $202.98; average loser = $61.07; RRR = 3.32:1; expectancy per trade = $159.79; Total P/L on account ($15,000) = 74.38%; Average risk = 18 pip ($94.50); Biggest risk = 36 pips ($181.20); average time in trade (winners) 1hr-20min; average time in trade (losers) 43 min; Total cash ratio = 8.19:1 Most of the above...
Hi
What time frame have you been using for YM, 1 min or 5 min?

Thanks
Regards
  • #140
  • Dec 22, 2013 4:52pm Dec 22, 2013 4:52pm
Quoting howard
{quote} Hi What time frame have you been using for YM, 1 min or 5 min? Thanks
Hello Howard...I use the 5 min chart, as I find the 1 min chart is just too fast for me. The 5 min chart seems to be a little more stable and puts you into the daily trend quickly and efficiently.

I've also found that using "volume" candles (candles that are drawn from a certain number of contracts instead of a certain number of minutes) is even more stable and far more reliable. But because they are not drawn on a specific time frame, you must sometimes be quick during a rapidly moving market when many contracts are changing hands.

I guess it really depends on what you prefer. The method is the same and it really doesn't matter how long the time is between the candles...just trade what you feel comfortable with. Try to resist the urge (it was very strong with me) to over complicate it. Adding this rule or that rule, or math (indicators), only serves to confuse and complicate the issue.

Good luck...I know you'll do well.
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