I trade through OptionsXpress and so I have to enter the
mechanical signals by hand. But OX's Java charts allow me to
overlay parabolic SAR indicators over the price and I find that to
act like an early warning signal. Yesterday I was long SSO from the
cross. About 3 p.m. or so Matt or Steve warned that the 5 min. SPX
was rolling over. At about the same time the parabolic SAR crossed
through the prices. If I had exited when that happened I would have
been better off than if I had waited until EOD. Also, getting out
early I would have avoided the gut-wrenching EOD gyrations that
seem to bedevil the markets so much these days. As it happened the
SAR crossed at just about the high of the day. EOD was lower. Just
an observation. Any thoughts?
if you test PSAR alone it is a very poor indicator of
anything. So thinking that it alone would give good signals
for exiting a system trade early is most likely not true.
There are other indicators to use as trade filters that would
probably be more worthwhile.........
but druck -- get a platform where you can backtest this
stuff. Then when you get an idea, you just try it out.
Its fun. You ask for thoughts, but the only worthwhile
thought, really, is "backtest it" because you're modifying a
backtested system.
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
Parabolic SAR
Posted by druck on 25th of Apr 2009 at 08:56 am
I trade through OptionsXpress and so I have to enter the mechanical signals by hand. But OX's Java charts allow me to overlay parabolic SAR indicators over the price and I find that to act like an early warning signal. Yesterday I was long SSO from the cross. About 3 p.m. or so Matt or Steve warned that the 5 min. SPX was rolling over. At about the same time the parabolic SAR crossed through the prices. If I had exited when that happened I would have been better off than if I had waited until EOD. Also, getting out early I would have avoided the gut-wrenching EOD gyrations that seem to bedevil the markets so much these days. As it happened the SAR crossed at just about the high of the day. EOD was lower. Just an observation. Any thoughts?
Remember it is a system.
Posted by padraigm on 25th of Apr 2009 at 09:20 am
Remember it is a system. If you use Parabolic SAR you have a variation of the original. You need to test it to know if it helps or hinders.
Pat
if you test PSAR alone
Posted by Michael on 25th of Apr 2009 at 11:33 am
if you test PSAR alone it is a very poor indicator of anything. So thinking that it alone would give good signals for exiting a system trade early is most likely not true. There are other indicators to use as trade filters that would probably be more worthwhile.........
but druck -- get a platform where you can backtest this stuff. Then when you get an idea, you just try it out. Its fun. You ask for thoughts, but the only worthwhile thought, really, is "backtest it" because you're modifying a backtested system.