Trading method #2 (Parabolic SAR trading)
Submitted by Edward Revy on March 29, 2009 - 18:48.
If you tried trading with Parabolic SAR for some time, you would notice that quite often, as soon as you enter a trade based on the first Parabolic SAR dot appearance, the market immediately turns against you, making your new trade start with a respectful loss.
Here is what I'm referring to:
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A fairly simple approach would be to wait for the initial candle to close after the first dot appears & then take the entry only if price exceeds beyond the low or the high of that candle (obviously in the direction you're trading in). i.e. if you're shorting, then wait for the price to go lower than the low of the 1st candle which appeared after the PSAR gave a downtrend signal, given that the trend is still intact. I personally haven't tested this with PSAR, but have used the technique in multiple timeframe trading for timing entires on the shortest timeframe. ERB.
i think psar same with tiny trendline, it's work for scalp.
How about this:
First look for possible resistance level and wait for them to be validated.
If valid, enter.
As soon as possible move the stop loss to break even according to broker-fees.
After that wait for the chart to either rise/drop in your favor or against you.
If the stop loss is hit then you`re break even.
Only if the chart develops as expected you would adjust the stop but not immediately and not as quickly as SAR suggests. You leave more space for volatility.
Just to share an idea.
Sorry in advance if these things are obvious or non-sense for you but I'm inexperienced.
What if we plot a 9 and 3 EMA on daily and hourly EUR/USD charts. If price is above EMAs in these charts than we open a 5minute chart and buy if PSAR (setting: 0.2) give buy signal or as soon as PSAR give buy signal: stop loss 13 pips (a five minute candle moves usually 6-8 pips, so price as room to move but if we wrong we're out in 2-3 candles). As for take profit: 1.5x stop loss=19 pips or 2x stop loss=26 pips or do not set take profit just wait for 3-5 candles and then decide if close position or trail stop (if possible!).
If price give different signal in daily and hourly chart, follow hourly chart. So if price there is above EMAs buy on 5minute chart following PSAR signal: same stop loss but closer take profit 1:1.
Viceversa for sell.
Any comments greatly appreciated.
Last but not least, is there someone in the forum making money with forex? Thanks in advance for feedback.
Regards
Ettore
Hi Ettore,
it makes sense, why not. You're looking to confirm the main trend before pulling a trigger on a smaller time frame. EMAs are simple and effective tools to do just that.
Lastly, if making profits was out of reach for me and other traders here, we won't be dedicating our lives and time to trading Forex, at least I certainly wouldn't.
Kind regards,
Edward
Concerning fibonacci retracement, have you tried plotting the levels for the one candle at the first SAR dot reversal only ?
Ashraf
I'm a profissional trader.
I will just say thit because time is money: if YOU know something that happens 80-90% of the time than you have a draft of a system.
Look for probabilities and consistency. Forget all the rest.
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