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SAR Method on 4hr Charts

  • #161
  • Jan 5, 2014 9:33am Jan 5, 2014 9:33am
Excellent method, have been using it for a while now.

I am trying to find a good software to test the 6 hour bars as well, maybe it will smoothen out some of the whipsaws.
Regards
  • #162
  • Jan 6, 2014 10:10am Jan 6, 2014 10:10am
Very good write up Buff...very thorough. Between this document and the videos most should be able to grasp the concept. The key (for me, at least) is DON'T complicate it any more. It works just fine as it is...I'm also working on a way to get into an ongoing trend, and or a ranging market using a PA trading signal with a fairly tight stop...to start with. I will share my results as soon as I have them.

Good work all...and best wishes for a prosperous New Year filled with opportunity.
  • #163
  • Jan 7, 2014 9:40am Jan 7, 2014 9:40am
Quoting gspajon
Very good write up Buff...very thorough. Between this document and the videos most should be able to grasp the concept. The key (for me, at least) is DON'T complicate it any more. It works just fine as it is...I'm also working on a way to get into an ongoing trend, and or a ranging market using a PA trading signal with a fairly tight stop...to start with. I will share my results as soon as I have them. Good work all...and best wishes for a prosperous New Year filled with opportunity.
Hello my friend. I use the trusty inside bar.
  • #164
  • Jan 7, 2014 1:25pm Jan 7, 2014 1:25pm
Quoting calderone
{quote} Hello my friend. I use the trusty inside bar.
WOW...now that is spooky...you were reading my mind. Yes indeed the inside bar is exactly what I use...and knowledge of Nial Fuller's "fakey" set up works very well with this method as well. Mostly those signals help me tighten my stop when I want to keep profit, but also help get you into an ongoing trend or scale in more during a pull back.

Well done.......you da man.
  • #165
  • Jan 7, 2014 9:38pm Jan 7, 2014 9:38pm
Quoting gspajon
{quote} WOW...now that is spooky...you were reading my mind. Yes indeed the inside bar is exactly what I use...and knowledge of Nial Fuller's "fakey" set up works very well with this method as well. Mostly those signals help me tighten my stop when I want to keep profit, but also help get you into an ongoing trend or scale in more during a pull back. Well done.......you da man.
LOL, like minds brother.
  • #166
  • Jan 14, 2014 2:49pm Jan 14, 2014 2:49pm
Seems some of you have tested the system in the mini Dow, as you can see I got short some days ago.
now my stop is at the point the trade has become a no lose trade...hope there´ll be some gains¡¡:

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  • #167
  • Feb 14, 2014 9:59am Feb 14, 2014 9:59am
Is anybody still using this system?
I have for a while and got a nice run initially, but then got chopped to hell, giving back all my profits.
I stopped applying it till i did some more testing, but now it seems to be on a roll again, it all comes down to cathing the trends and look for a way to avoid the ranging periods.
Anybody who has a nice filter for forcasting ranging markets?
Persistence will get it. Consistency will keep it.
  • #168
  • Feb 14, 2014 12:07pm Feb 14, 2014 12:07pm
Quoting Chake
Is anybody still using this system? I have for a while and got a nice run initially, but then got chopped to hell, giving back all my profits. I stopped applying it till i did some more testing, but now it seems to be on a roll again, it all comes down to cathing the trends and look for a way to avoid the ranging periods. Anybody who has a nice filter for forcasting ranging markets?
Yes Chake, I still use this method and find it works very well for me. Being successful with this method really depends on you ability to follow it to the letter and control your risk...(much the same as any method I imagine).

The issue is you NEVER know in advance when the range is coming or when the trend is coming...and trying to predict that will have you pulling your hair out. The only thing you will find is that you get "stuck" in a range. Depending on the time frame you chose, you can trade inside that range using a smaller time frame, or just switch to a larger time frame and keep your SAR (stop and reverse) outside the range.

This is where your discretion comes into the system...you must decide which to do. I have recently taken to just moving to a larger time frame and holding through the chop. I did this based on a small statistic that you can find pretty much in any trading book. The vast majority of ranges and consolidations result in trend continuation...those that don't are reversals...so a SAR outside the range that is triggered is usually a reversal and I don't want to be in the trade anyway.

All time frames consolidate...all time frames range...all time frames trend...you must decide which time frame you can work with and apply the method as best fits your personal ability to maintain the discipline.

Hope this helps.
  • #169
  • Feb 14, 2014 12:33pm Feb 14, 2014 12:33pm
gspajon, thanks for you're reply, it's very true, and i agree with everyting you say.
I use a stop loss so that no trade is ever going to ruin me, and so that i have my risk per trade under control, the hardest thing for me is finding myself stuck in a range that keeps hitting the SL a couple a times in a row. Sometimes even a couple a times in one day...
But not taking the next trade is not an option, because that next trade might be the one that is cathing the trend, and making you the profit that this system is depending on.
Thanks for the good advice, i will look into that.
And also trade non correlating pairs, futures, commodities, whatever.. so hopefuly when one ranges the other one is still trending.
Persistence will get it. Consistency will keep it.
  • #170
  • Feb 14, 2014 1:44pm Feb 14, 2014 1:44pm
Quoting Chake
gspajon, thanks for you're reply, it's very true, and i agree with everyting you say. I use a stop loss so that no trade is ever going to ruin me, and so that i have my risk per trade under control, the hardest thing for me is finding myself stuck in a range that keeps hitting the SL a couple a times in a row. Sometimes even a couple a times in one day... But not taking the next trade is not an option, because that next trade might be the one that is cathing the trend, and making you the profit that this system is depending on. Thanks for the good...
What time frame are you trading? I find it odd that you are getting stopped at the same place more than once a day. That would certainly say to me that a range is in place and you could decide to take the trade off on the next cycle that goes in youw favor...or move the stop outside that range. If you do decide to exit...you can straddle the range with stop orders and trade the next break. Personally I just leave my stops outside and go do something else while the market decides where it wants to go...don't over think it...the market will do what it's going to do...nothing you do will change that.
  • #171
  • Feb 14, 2014 4:30pm Feb 14, 2014 4:30pm
Quoting gspajon
{quote} What time frame are you trading? I find it odd that you are getting stopped at the same place more than once a day. That would certainly say to me that a range is in place and you could decide to take the trade off on the next cycle that goes in youw favor...or move the stop outside that range. If you do decide to exit...you can straddle the range with stop orders and trade the next break. Personally I just leave my stops outside and go do something else while the market decides where it wants to go...don't over think it...the market will...
Well said. When I find a range I'll box it and wait for a break either way. I'm just along for the ride.
  • #172
  • Feb 14, 2014 5:17pm Feb 14, 2014 5:17pm
I trade the hour, good advice guys, i will take a look at it. Maybe if i have the time i will post a chart.
Thanks for the support!
Persistence will get it. Consistency will keep it.
  • #173
  • Feb 16, 2014 6:15pm Feb 16, 2014 6:15pm
My recollection is that it should be used on a 4 hrly chart. Anyway I have observed some stella results recently where SAR has kept you in the trend, XAU, CAD to name two, then I saw some whips in Yen and EUR BUT if you ran with the first two the P/L would have more than covered the whips in the others... funny thing that R/R thing!... Personally I find SAR is an excellent way of trailing a profit stop on an existing position that I have got into via other methods. Running profits is hard but you have to in order to pay for your losers. SAR is a great tool to help me do that. Cheers.
  • #174
  • Feb 17, 2014 7:57am Feb 17, 2014 7:57am
Quoting Hyperion
My recollection is that it should be used on a 4 hrly chart. Anyway I have observed some stella results recently where SAR has kept you in the trend, XAU, CAD to name two, then I saw some whips in Yen and EUR BUT if you ran with the first two the P/L would have more than covered the whips in the others... funny thing that R/R thing!... Personally I find SAR is an excellent way of trailing a profit stop on an existing position that I have got into via other methods. Running profits is hard but you have to in order to pay for your losers. SAR is a...
The presenter on this thread was recommending it on a 4 hr chart. I have since come to conclude that the method will work on pretty much any time frame. It really depends on whether you can commit to checking it briefly for every candle (to mark the new extreme or move your stops).

As a trend following method I have begun utilizing it to do that (follow trends) and as such I move my "trading window" up and down the time frames depending on where I see the trend developing. This necessarily means my stop gets larger and smaller when I move out to a larger time frame, or in to a smaller one. I do this solely to avoid the whipsaws and ranges that inevitably occur. Once I see a large range forming on a larger time frame I will then move down to a smaller time frame and try to exit at the range extreme that gives me the greatest profit.

From here I will stay on this time frame and trade inside the range, (as this time frame will be trending between the two extremes. ) Once the range breaks (hopefully I am in on the ride from the other side of the range), I will move out to the larger picture again and ride the next trend.
  • #175
  • Feb 17, 2014 9:07am Feb 17, 2014 9:07am
Quoting gspajon
{quote} The presenter on this thread was recommending it on a 4 hr chart. I have since come to conclude that the method will work on pretty much any time frame. It really depends on whether you can commit to checking it briefly for every candle (to mark the new extreme or move your stops). As a trend following method I have begun utilizing it to do that (follow trends) and as such I move my "trading window" up and down the time frames depending on where I see the trend developing. This necessarily means my stop gets larger and smaller when I move...
Nothing short of resourceful. Not surprising I might add based on your known history of a trader/analyst. I have to admit that I wish you would create a video documenting your method with SAR. It's such a great management tool it allows traders to fine tune their methods. I'm sure other participants besides myself would enjoy your insights. Just a thought. Well done.
  • #176
  • Feb 17, 2014 5:59pm Feb 17, 2014 5:59pm
Quoting calderone
Nothing short of resourceful. Not surprising I might add based on your known history of a trader/analyst. I have to admit that I wish you would create a video documenting your method with SAR. It's such a great management tool it allows traders to fine tune their methods. I'm sure other participants besides myself would enjoy your insights. Just a thought. Well done.
Thanks Mike for your vote of confidence...as far as making videos goes...I'm afraid I don't really know how to do that nor do I have the software available. As well I don't really wish to distract from the purity of Buff's method. Its good all by itself, and really all I've done is take a few technical analysis tools and used them to make the method suit my personal view of the market.

The basic method of trend following is the same, and I only do something a little bit different to avoid getting "chopped" or "whipped"...that is as I explained...use the technique of multiple time frames to keep stops outside the whipsaw or (if its a really large range), trade inside until it breaks. There is really nothing new to this idea and I don't believe my perspective is unique...

Again thank you for your kind words and confidence.
  • #177
  • Feb 21, 2014 2:56pm Feb 21, 2014 2:56pm
Quoting gspajon
{quote} Thanks Mike for your vote of confidence...as far as making videos goes...I'm afraid I don't really know how to do that nor do I have the software available. As well I don't really wish to distract from the purity of Buff's method. Its good all by itself, and really all I've done is take a few technical analysis tools and used them to make the method suit my personal view of the market. The basic method of trend following is the same, and I only do something a little bit different to avoid getting "chopped" or "whipped"...that is as I explained...use...
The great thing about this method is that it lends itself to your creativity. I've managed to find yet another way to enter into a trend and manage my trade on the 4hr with this method.
  • #178
  • Feb 23, 2014 6:45pm Feb 23, 2014 6:45pm
Quoting buff
Say we were in a long trade already (we have bought), so the red line which is your SAR (stop & reverse) is initially set at a low of a candle somewhere below your blue entry line. Every time there is a new higher high on one of the candles above the blue line, we put a yellow line at that high. There are only 4 yellow lines, so once we have them all on new highs and then there is a 5th new high, all we do is take the bottom yellow line and move it up leapfrogging the other yellow lines, and place it on that 5th new high. As long as price continues...
Just joined the thread and trying to clarify the entry, especially the first entry. I believe that the Daily EUR/USD chart show the exact conditions of the post quoted, apart from already being in a long position. Yes, I know it is not 4 H, but a price bar is a price bar and looking for examples in real time without cherry picking.

So, do I wait for break out at top yellow line 4 or break out of red line, or low risk 4 H entry long to begin a trade position? Your thoughts appreciated, thanks.
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It takes a lot for me to IGNORE you, but you can try.
  • #179
  • Feb 24, 2014 7:12am Feb 24, 2014 7:12am
Hi Erebus,

Strictly stated, the bottom yellow line should be moved to the top of the red bar that pinches through the top yellow line.

And for the entry according to the rules of this thread, you should wait for the price to move down through your red line, there you can place youre stop short order.
Persistence will get it. Consistency will keep it.
  • #180
  • Edited 7:56am Feb 24, 2014 7:24am | Edited 7:56am
Quoting Erebus
...So, do I wait for break out at top yellow line 4 or break out of red line, or low risk 4 H entry long to begin a trade position? Your thoughts appreciated, thanks.
Erebus...If you take that same chart and apply the same method to the 4 hr or 6 hr chart you will see that your red line is indeed an entry short (if you get stopped in). I would be cautious about buying a break of the top. But that is just my personal view...(I try to never buy the high or sell the low).

You will note that this point is the same on the 4 hr chart as well as the daily chart, as well as the hourly chart (at least now that I am looking at it at 07:20 hrs CST). You will soon see that when these entry points line up on all time frames and if the market takes these points they are usually the best.

Chake is quite correct in that you have not completely counted the last for highs on your daily chart...this is very important to the method.
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