Parabolic SAR indicator
Trading with Parabolic SAR involves the following signals:
PSAR dot is above the price - downtrend.
PSAR dot is below the price - uptrend.
Parabolic SAR indicator is a trend indicator, which tells Forex traders about price stop-and-reverse points as well as trend direction. Its concept of usage is easy to understand from the first look. Parabolic SAR appears as a set of dotted lines, where each dot represents certain time period.
When price is above Parabolic SAR dots, Forex traders should be holding Long positions only. Once Parabolic SAR dots come on top of the price - it is time to change trading positions to Short. Parabolic Sar indicator literally allows being in trade all the time.
How to trade with Parabolic SAR indicator
However, trading with Parabolic SAR is not that simple; not all Parabolic SAR reversal signals can be traded profitably.
Let's turn to advice given by the developer of Parabolic SAR indicator - J. Welles Wilder. He suggests using Parabolic SAR, first of all, for trailing stops and finding the best exits.
The way Forex traders use Parabolic SAR is by simply setting a Stop loss order at the level of the most recent SAR dot appearing on the chart. Stop is then trailed along with each new Sar dot till trend remains intact. Once Parabolic SAR indicator changes its position - SAR dots appear on the opposite side of the price - the trade is closed.
Welles Wilder doesn't recommend using Parabolic SAR as a stand alone indicator. The main reason for that is: Parabolic SAR can easily create whip-saws (false signals) during periods of market consolidation. The Parabolic SAR works best during strong trending periods, which Wilder himself estimates occur roughly 30% of the time. Thus Forex traders will need other Forex indicators to identify those strong trending periods.
For himself, Welles Wilder developed ADX indicator - another trend indicator - which tells what kind of trend is dominant and how strong the trend is. Upon knowing the trend and its health Forex traders can pick appropriate signals from Parabolic SAR and disregard the rest.
How do you determine the trend if you don't want to use ADX. Try 50 EMA. Price readings above it would suggest an uptrend, below - downtrend.
Parabolic SAR settings
So, Parabolic SAR is developed to keep stop loss level moving adjusting to new prices and thus locking profits on its way.
The formula of Parabolic SAR includes an "acceleration factor", which allows to react to market changes fast as the trend starts to accelerate. At the beginning, new Parabolic SAR dots are placed close together and then accelerate as the trend advances.
Parabolic SAR has two variables: a step and max step. Settings recommended by W.Wilder are: a step of 0.02 and the max step of 0.2.
The step sets sensitivity of Parabolic SAR indicator. If the Step is too high, Parabolic SAR becomes more sensitive and will flip back and forth more often, with lower step Parabolic SAR will become smoother. Maximum step sets a cushion between price and Parabolic SAR. The higher the max step the closer the trailing stop will be to the price.
Parabolic SAR - useful tips:
When space between Parabolic SAR dots increases significantly, it indicates that acceleration formula for SAR is already working. Thus, if you have missed out on an entry, it might be better to avoid late entries at all and rather wait for an opportunity to re-enter the trade with a help of, for example, Stochastic indicator.
Parabolic SAR is only a mathematical interpretation of the price. Even though it helps to identify initial place for a Stop, it may not be the final or best one sometimes. Forex traders who also look at support/resistance levels, round numbers, trend line etc may find even better place for Stops to be set.
Parabolic SAR indicator Formula
Sharing with you Heiken Ashi indicator. That doesn't repaint.But it has time restriction. I think it'll end tomorrow?I wonder, if someone can take off time restriction.
Overview The Ichimoku Kinko Hyo, Ichimoku Cloud, Equilibrium Chart was developed by Japanese newspaper writer Goichi Hosoda in 1968, and it is more familiar to futures and equity traders than to forex traders. In spite of its lacklustre popularity, however, the indicator is powerful, and innovative, worthy of greater attention than it receives currently in the trader community. Note: Past performance is not indicative of future results. To understand how this indicator functions, we need to recall that the ichimoku cloud is a strategy more than an indicator. It combines two support/resistance levels to create a cloud, or reversal zone, and depends on the crossover of the tenkan and kijun sen to generate trade alerts. But since it is a strategy, it is not as versatile as some of the other, more basic tools like moving averages or the RSI. Thus it performs better in a more specific market type in which it is more effective as a strategy. A typical trading scenario is generated when the red and blue lines generate a crossover, as observed on first and second vertical bars on the chart above. The purple and reddish dotted, areas, termed the cloud, or kumo, function as support/resistance levels where a possible reversal is indicated. Let’s a take deeper look at how the indicator is calculated. Calculation The Ichimoku Kinko Hyo indicator is calculated from four components with the following formulae: 1. Tenkan Sen: (Highest High + Lowest Low)/2 over 7-8 bars 2. Kijun Sen: (Highest High + Lowest Low)/2 over the past 22 bars 3. Senkou Span A: (Tenkou Sen + Kijun Sen)/2 plotted over 26 bars into the future 4. Senkou Span B: (Highest high + Lowest Low)/2 over the past 44 bars, plotted 22 bars ahead Tenkan sen and kijun sen are essentially moving averages, and are used in a similar way with tenkan sen being the more sensitive of the two. The senkou span A and B are the main features of the ichimoku indicator separating it from an ordinary oscillator. These two values come together to create a cloud, or kumo, which is used a support or resistance level by traders depending on market conditions. Usage of Ichimoku Kinkyo In spite of the apparent of complexity, the Ichimoku cloud is very simple and easy to use once you get a grasp of how it works, and what it is. As we mentioned at the beginning, the indicator is more of a strategy than an indicator. It combines four separate tools into a single visual framework for trade decisions. Trade signals are generated as the tenkan sen moves below or above the slower moving kijun sen, in a way very similar to the interaction of moving averages in the MACD, or the stochastics indicators. A bearish trend is indicated by the tenkan sen moving below the kijun sen, and vice versa. Once such a signal is generated, and we anticipate the development of a trend and open a position, the kumo (cloud) of the indicator comes into the picture. As mentioned elsewhere, the cloud is the support/resistance zone of the trade. In a bearish position, we expect that the price action will remain outside of the kumo most of the time, and if it remains in that region for too long, it may be time to reconsider or close the trade. Conversely, we will maintain our position for as long as the support/resistance zone established by the cloud holds. This makes ‘letting profits run’ a much easier task than it is with a simple crossover/ support/resistance strategy, since the problems created by volatility are handled better by the ichimoku cloud. Take profit orders can be placed at any point outside of the cloud. Stop-loss orders should be placed in or at the edge of the cloud, and money management methods must always take into account the possibility of maximum losses being incurred as the cloud support fails. Conclusion There are a couple of conclusions that we can draw from our discussion of the indicator. The Ichimoku cloud indicator is a complex tool that provides a lot of information when it is depicted on the chart. Two moving averages, and a layered support/resistance area makes the implementation of complex strategies a possibility, but also renders the addition of any extra moving averages, vertical Fibonacci levels, or arbitrary support/resistance data superfluous. Understanding the components of the indicator, and the rationale behind its usage will be helpful in avoiding noise on our charts. If we possess credible information about where order clusters are, it is not a good idea to utilize the ichimoku kinko hyo. The kumo, or cloud component of the indicator is useful in conditions of high market volatility where strict adherence to single support/resistance levels on the chart may result in lots of false signals and small failed trades. By providing a zone, instead of a line, this indicator can be helpful in isolating more reliable signals from noise. We could easily construct a support/resistance zone with multiple Fibonacci indicators, or simple support/resistance lines, and decrease the number of generated signals by refusing to act on mere breaches of the outer and inner lines. The strength of the Ichimoku cloud against such a strategy is automation and speed. You have to depend on the same basic formulae in all market conditions, with little manual intervention,but at the same acquire greater flexibility in your decisions. In conclusion, we can summarise the advantages of the Ichimoku cloud as concision, automation, and simplicity. Its disadvantages are a lack of customizability, and blanket coverage for lots of possible market configurations. If you think that the particular market situation is suitable for trading with two support/resistance lines, and two moving averages, the indicator is a perfect choice. If you conclude that other or more tools are necessary, it is a good idea not to take much time with the Ichimoku cloud.
Here it is...While testing freezes the screen so attached source file for the " WWI" expert coders to correct the code and re-attach for testing...Thank you...and good luck....