Scalping system #4 (5 pips with GBP/USD)

Hi Keith,

No problem, simply send me an email with attachments to

and I will re-publish it here.

Another simple option to share an image is to upload it to any free file hosting sites and post a comment with a link here.

We'll look at those screenshots together.

Regards,
Edward

Edward,

I really appreciate your effort to answer my question, but I feel I probably did not phrase it well enough to help you understand what I was asking, so that is my fault. My situation is not speaking of the one current dot of the SAR on the current candle, rather a series (at times, a very loooong series) of SAR dots specifically on the MACD. They would change looks when I would leave the chart open untouched for long periods of time, and when I would switch off the chart and back on to the chart. If it would help, I am happy to send screen shots to help you understand what I mean. Is there a way to do that?

If others are not experiencing this 'glitch' I am referring to, that will tell me there was a problem with me adding the indicator to my MT4 trading software. (as a note, I did copy and paste code, instead of unzipping a .mqt file, it is possible the glitch is related to this).

As far as the backtesting note, I completely agree with you. The one caveat I was highlighting is that a backtester better be very confident that if his visual tests include indicators, he better know for sure that the historical data is an accurate reflection of what the chart and indicator looked like in real time. My experience has shown me this is not always the case. But when you base your visual backtesting on breakout of candles (and others of course), I am fairly confident you are on safe ground. :)

Kudos to you, your site, your setups, and your gracious answering of questions Edward! :))

In your debt of gratitude,

Keith

Hi Keith,

Any trading idea starts with looking back at old charts. It is impossible to invent a new strategy, new rules without backtesting. Therefore, I see nothing wrong in that process. The other thing is that you don't have to rely on backtesting results as they will not guarantee future performance, that's why we need to forward test every strategy.

Surely, the situation you've mentioned is well known to me and to any trader who uses Parabolic SAR indicator for scalping. It does "changes its mind" and there is nothing we can do about it. If you see that indicator has changed its readings on the CLOSE of a price bar, exit. Never exit while the current bar is open, the indicator may "change its mind" again.

Regards,
Edward

Alex, (or Edward of course :)

had a question about this setup. I have both back tested (just visually, and I don't give such a backtest much credence because of the ease of curve fitting) and am now forward testing it on a demo account. So far, I am quite impressed. But I do have one question. Have you noticed that in real time, if you stay on a chart (don't switch away and then switch back) at times the SAR on the MACD will give one look... like say a long flat line on the bottom... but when you go away from the chart and then come back, the look has completely changed. Like, after coming back to the same chart, same time window, that previous long line of flat SAR's underneath has switched to above and below and above and below... I can send screenshots if what I am saying doesn't quite make sense.

Anyway, was curious if anyone else was having this happen, and what we should make of it. To me, it just confirms what I already thought: visual backtesting based on past chart looks is very suspect.

That said, forward testing on demo account (which has its own issues as well, you surely know) has been very, very promising.

Your thoughts?

Keith

hi all,
how's the system using for GBP/JPY with more pips?
tks
Ele

Hi all,

I made custom SAR on MACD for MT4 platform.

Admin, please post this file
Parabolic_SW.zip to here.

I hope it will help anyone who want to use this great strategy in MT4 platform. Thanks to Edwards and this site Admin for this great strategy.

NOTE: Just drag and drop this custom indicator from "Navigator" area in MT4.

Best Regards,
syanwar
Admin of Viking234

Hi, guys

I've created the simple indicator for MT4 which implements "SAR on MACD". It'll draw a histogram: when it is above zero it means that the SAR of MACD is above the MACD, and vise versa.

Here is the code:
SAR_on_MACD.doc

Hi Steve,

To place Sar over MACD on Oanda platform:
a) set MACD on the chart.
b) right click on MACD and choose "Add study to MACD"
c) choose SAR indicator

There were no testing conducted for other currency pairs as far as I know; however I believe that this strategy was in some way "tailored" to GBP/USD pair and 5 min trading.

Regards,
Edward

1) Would you mind showing me how to place the sar indicator over macd on oanda?

2)Also does this method work in other markets?

3)Is there a reason the 5 mins is the best time frame

Thanks,

Steve

I can't seem to apply a SAR over the MADC without it going flat line. The parameters don't seem to adjust. Can you help? I'm using MArket Scope 2.0

Hi Gibson,

I don't look for simultaneous signals. If they happen to be, that's good, but if one SAR (either one) signals earlier and the second signals later, it's also a valid signal.

Happy scalping,
Alex

hi alex,

could you clarify? entry only when both sars appear at the same time/candle, or also if the second agreeing sar appears later, after the first sar?

there seems to be no way to put the sar on the macd in mt4, unfortunately. but maybe someone, someday, will be able to code it.

thanks!
gibson

Hi Alex
Thanks once again for the prompt reply.
I have been following the system for some time now and as with all systems it works best when you check for trends on a longer time scale chart.Will keep testing!
Thanks again for your time and effort.
Regards
Mark

Hi Mark,

That's in fact pink EMA I left on the chart while making this sreenshot, probably standard 14 period. I remember I was trying to twist it to filter some trading signals. You may test it too.

The idea is that when you get a signal from both SARs (same as in the rules above) you also check on a position of a candle against 14 EMA: if both Sars tell to Buy and a candle is trading above 14 EMA - this signal should offer a safe entry; if the candle is below 14 EMA - risks are higher and if I'm not up to it - I stay out and wait.

Try it out and tell me what you think about it.
Regards
Alex

Hi Alex
On the above illustration I have noticed that there is a pink line on the chart which seems to follow the SAR dots.Is this a moving average?I don't seem to have it on my Oanda chart.
Also have you any more tips on this method of scalping?
Regards
Mark