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RandomQuant
Trusted Member
Joined: 5 months  ago
Posts: 55
03/01/2017 3:51 am  

The parabolic time/price system


  • Function of time and price
  • True reversal system ( stop point = reverse point or "SAR" )
  • Allow for reactions at the beginning ( prevent whipsaw )
  • Accerelate as the move began to top out ( protect profit )

 

Trading rule

 

        Open long ( Close short ) : High >= SAR

        Open short ( Close long ) : Low <= SAR

 

Alternative - Use in trending market

 

        DMI up : take only long

        DMI down : take only short

 

SAR calculation 

 

1) For the first day of entry

 

        Long : First SAR = LO SIP of previous short 

        Short : First SAR = HI SIP of previous long

 

2) For the second day & there after

 

 SARtomorrow = SARtoday + AF * ( EPtrade - SARtoday

 

  • AF = accerelation factor

 

        Long : start at 0.02 then increase 0.02 for every new high until 0.2 reached

        Short : start at 0.02 then increase 0.02 for every new low until 0.2 reached

 

  • EPtrade = extreme price point for the trade 

 

        Long : extreme high price for the trade

        Short : extreme low price for the trade

 

3) Never move SAR into previous day's or today's range

 

        Long : SARtomorrow = min( low , previous low, SARtomorrow )

        Short : SARtomorrow = max( high, previous high, SARtomorrow )

 

Parameter range

 

        Step AF : 0.018 - 0.021

        Max AF : 0.20 - 0.22

Edited: 5 months  ago

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