Has anyone here tried to use Parabolic SAR as a filter, instead of using it as an entry/exit signal ?
The idea is to be on the correct side of the trend. One could take trade entry signals based on whichever indicator (oscillators/pivots/etc) one chooses , but only if the PSAR confirms the direction of trade. The win/loss ratio seems to improve when I use PSAR as a trend filter. I've set the PSAR increment at 0.01
I really like the parabolic SAR. When the market takes off like a rocket, the SAR indicator tells you "Hey, the market is taking off like a rocket."
Yes it was sarcasm. All these indicators are like driving a car by looking at a rear view mirror. They tell you what has already happened. Many of these indicators impressively correlate with completed charts. But if you use them in real time (where you cannot peek ahead into the future), you'll find that they are hard to trade off of. SAR is one of the more amusing indicators because what it detects is something that is easy to see in the charts.
Yes, you're right. But my trade entry set-up is the same for trends & counter-trends. Adding the PSAR as a filter in the last couple of weeks has kept me out of low probability trades. Let's if this lasts.
==================== Big rig tractor trailers use rearviw mirrors all the time; lots of them & actually they have to. Dont drive a tractor trailer myself; but yes, like it on my charts, but not to use it like it actually the way it was designed for . In other words wouldnt get long airlines just because my PSAR ''says to '' Would much rather use my frequent flier miles ;& occasional short airlines No wonder so many people dont like TA and ; just because brand name airlines are great companies doesnt mean i want to trade thier stock long.
Price is patterned and repetitively patterned. To see and repetitively not understand sufficiently what you see is the trading learners conundrum. Parabolic SAR points or other types of lines if put up on your chart are allowing you to see price through a prism .. differing perceptions or dimensions of price. Whilst I can put such lines or dots on my charts, I do not run any indicators at the bottom of my charts because that is my preference.
Ive experimented with it as a discretionary filter for reversals, obviously all its doing is telling you there are x number of days in your reversal pattern. I suspect its best use is in add on trades, in place of fib levels , pivots , etc. Just cleans up the chart a little.