SAR Method on 4hr Charts

I'ts been while since my last comment on this thread so I thought I'd bring you up to date. I am now full time trading and have moved from Australia to Thailand, and so far, so good. It has only been a few months to date and I've yet to dip into my savings to survive. Hopefully that will continue.

I originally started trading off the Daily charts with a different system. It was going well for a while but then I suffered the inevitable drawdown and realising that it would take me a while to recover just due to the amount of time between signals on such a large time frame, I decided to drop this same system down to the 4hr charts on one account, and then look for a 1hr trading system on another account. That is when I decided to go back to the above system trading the lines on the 1hr chart. I was concerned about missing out on sleep if I was going to trade every day, but Thailand's time zone, which is 3 hours behind my old Brisbane time zone, actually works pretty well. I trade multiple pairs (about 15) and only really have to watch the charts between 8am and midnight daily. Sounds like a lot, but I don't get to the charts until about 8.30am local where it is just a matter of checking things and bringing all the lines up to date. Then up until about 4pm, I'm only checking them every couple of hours when I get around to it. Even in the evening, I'm not really at my computer that often. I am aware of any major news and like to be present for this if I have the relevant pairs close to the action. After about 9pm local, I'm at my computer just updating spreadsheets and doing testing, and in bed just after midnight. So it is not that hard for me, but keep in mind, I have no other responsibilities. Even on a recent 8 day holiday to Ho Chi Minh City, I still managed to keep on top of these trades, which included going out on all day tours etc.

Since I have gone back to the 1hr charts trading probably way too many pairs, I have slightly modified my rules just in an effort to keep me out of reversing too early. Nothing major but it seems to be working for me pretty well so far. I am still very discretionary when it comes to some exits and I will also sometimes set a hard stop inside the SAR level just to lock in profits. There were some huge moves last night on several pairs, and when I see 100+ pips profit on the 1hr charts, I take half my position immediately off the table and look for ways to either mover the remaining half to break even or tighten up the stop.

So if anyone is interested in discussing this method a little further, I'm more than happy to oblige. I don't have access to my video recording software these days but I'm sure I can work something out. Cheers. Jim

Hello Buff...nice to hear from you again. I'm afraid I had to abandon this method. And here is what I found...I had to dig way back in my journals to find this:

1. Most all profit gets eaten down in the inevitable range that forms when the market pauses or reverses.
2. Because the ranges often test the limits with out continuing (false breaks) losses are often compounded when utilizing the rules established here on this thread.
3. While the trend following features of this method are excellent, the inevitable exit which (puts you back into a ranging market) is far less efficient than simply exiting at a predetermined spot.
4. Finally, if a market creates an expanding range. (I call it a "trumpet" pattern), virtually ALL profit realized on the last run will be taken as you will get triggered and stopped multiple times before the reversal or continuation.

I have found a far better way to trade that actually embraces ranges and utilizes them to your benefit in both trending and ranging markets.

I wish you luck with this method and hope you don't eat up all your capital trying to improve this method

gspajon,

Good to hear your feedback and they are all issues that I agree with. They basically all revolve around the same issue, and that is a ranging market, or the higher highs and lower lows (trumpet pattern) scenario.

A few ways around this issue as you don't really know when this is going to happen, and you don't want to miss the big move when it does happen, whether that be a news release or just the pair breaking out of a long tight range for whatever reason.

First of all, plenty of manual back testing. Get on the charts with your lines and your own rules and test it out over a decent amount of time. Record losses and wins and see what you end up with. Try different variations of your rules to get different results. I have gone stir crazy doing this over the years.
Choose pairs that do have some volatility and that experience the big moves on a regular basis. Something like the GBP/NZD, but if you want to watch paint dry, then trade the EUR/GBP.
And taking this a step further, be more aggressive in your SAR/stop placement on certain pairs and give other pairs room to move. This is especially the case if some pairs you are trading are moving in correlation at the time eg big news out of the UK, then all GBP pairs may be on a big move but you are not sure if it will reverse, you may want to tighten up the GBP/JPY but not be so tight on the GBP/USD.
Another way would be to use a hard stop instead of relying on the SAR to get you out. For example, you have had a pretty decent move on one pair but your SAR is still a long way away, then just put a hard stop in a place you are happy with and keep the SAR as a reversal point only. If you are then stopped out, then continue to move the lines as you normally would and eventually you will get a reversal trade. Don't worry if the trade then continues in your original direction as you should be happy with your profit anyway.
And finally, use some other indicator/s or method to help you determine if it is a ranging market and just stay out of the market with this method if that is the case. How you determine that at the time, I have no idea, and I'm of the opinion that I don't really care as I'm happy to trade through it. The back testing has shown me that I will be profitable eventually.

As I've said all along, this method is just a framework of a system that you can customise to suit your own needs. It won't be for everyone. There will be losses along the way and you will get frustrated at times. But you can set it up to be fully mechanical if you are that way inclined.

I have attached my favourite custom indicator to this post, the QMP Filter. I mainly use the QMP Filter on my charts which just puts green/red dots on my chart to show buy/sell points. This indicator is actually just made up of the other two indicators attached, the MACD Platinum and QQE Adv. You will just need these on your platform so the QMP Filter will run properly. I have also attached an ATR Stop indicator to assist with stop loss setting. I will post a few screen shots of the set ups next week, but you could trade off these signals as a stand alone if you wished. Cheers. Jim

Hopefully this link will work that should take you to a google doc that shows my trades since early May trading this method off the 1hr charts. These are all live trades on a $20,000 account using 0.2 lots as my initial entry.

If I see my trades at +100 pips, I normally just close half (0.1 lot) out manually and set my stop to break even, hence the two close method on some trades. If there is a 2 part close on a trade, then I work out my total pips based on the position size being 0.2 lots (I don't double my pip numbers to embellish my results).

The trades near the bottom are still open, and where you see yellow fill partially filling a row, that signifies that the trade has been partially closed and now just waiting on full closure.

The results columns are either in red for loss or blue for profitable, and that includes the swap.

Check it out at https://docs.google.com/spreadsheets...it?usp=sharing

Cheers. Jim

There was another post immediately after Buff's Post 204. The poster spotted some inconsistencies in Buff's claimed results. The post has now been deleted. I smell a rat, or is it bullsh!t I can smell? Would the author of the deleted post like to PM me?

Hi, not sure whether you are referring to the post I made yesterday and subsequently deleted. The post was nothing to do with spotting any inconsistencies in buff's claimed results. There were some things I wanted some clarifications on, which became clear on closer examination of the spreadsheet, rendering my post redundant and hence I deleted it.

Hi Danjuma. Yes, it must have been your post.

I apologise unreservedly to you and Buff. I should not have jumped in to accuse Buff without investigating further. This is certainly an interesting and unusual method of trading.

How is this going Jim? What is the difference in the strategies between JAGFx1 and JAGFx2 on your blog, as one seems to be performing well whilst the other is in a big DD?

No response?

Sorry danjuma, I didn't see your first post above re the difference between 1 & 2 as I only rely on my weekly update from Forex factory to advise me of any thread updates I am subscribed to. I'm not on FF that much these days as it tends to sidetrack me at times.
I did start both of those accounts with a strategy trading off the Daily charts. Basically the same on each but then i figured that wasn't really going to achieve much. Therefore I changed things up on one of the accounts and just wanted to try a few different strategies on smaller time frames. Things got a way from me on one strategy which has put me in this hole. I've arrested the slide now and just going to try and work my way out of it with smaller position sizes and trade a little more conservatively. With my traveling lifestyle and not wanting to spend too much time watching the charts, ideally 4hr charts and above probably suit me more, but I keep on getting dragged back to the 1hr charts. I am now looking to continue with the SAR method with a bit of a twist where I use one of my EAs to help with extra trades on the same chart, that will either assist by locking in profits, reduce risk or give me a hedge. Still early days on this as I am still working out the finer details with plenty of demo trading going on with different settings. Cheers.

Thanks.

Hi everyone

I can see this site as not had any visitors for quite some time.
I was just wondering if any one had come up with a EA for the stop and reverse line.
I remember that's where the trouble was with this system.
Perhaps someone might have the time to write a EA for a stop and reverse line.

Sometimes we overlook things and move onto the next thing.
I think this system might be worth a EA.
So we can run a test and see what the system can really do.

Thanks for looking and your time.

i am going to test this system next week.

I have put a pending buy order. On the chart with a stop and pending sell order.
It would be nice if we had an EA that did this for you. But I will give it a go anyway
thank you for your time.

Attached Image (click to enlarge)

test as start

i will be back in 4 hours

last one this moring