Do You Want To Spot The Most Wonderful Trading Opportunity use Parabolic SAR

Do You Want To Spot The Most Wonderful Trading Opportunity which could have easily gave you a profit of Rs. 40,000 in just 3 days.

CASE STUDY : GODREJ CONSUMER PRODUCTS

Entry 1000 SL 980 Target 1080 CMP 1048

 

PARABOLIC SAR

Parabolic SAR provides an early entry for a trader with a stop loss level which moves incrementally with the price whichever way the trend is moving.

Keep in mind that the parabolic SAR sequence only goes in one direction at a time and it changes direction when the underlying market trend changes.

J. Welles Wilder Jr. an American Mechanical engineer turned Technical analyst, developed the PARABOLIC SAR which refers to price and time based trading system. He calls it a Parabolic Time / Price system. SAR Refers to Stop And Reverse. SAR is the indicator used in the trading system.

Its an indicator that is designed to suggest when a market trend is about to undergo a change in direction. It is a fastest indication that the change is occurred. thus it should enable traders to maximize profits by selecting optimal entry and exit points when you first enter in to a position the stop loss is according the PSAR level. This stop should be low enough to allow for some small set backs but high enough to prevent any significant losses.

As the price rises the parabolic SAR should rise with it but more rapidly. it casually closes the gap between the market price and the stop loss level. Its shape is similar to mathematical function parabola hence it is called as Parabolic SAR.

Eventually a small reversal in price momentum will cause the intersection of the PARABOLIC SAR & price generating a signal. In a downward trending Market the SAR is above the Priceline and in an upward trending market the parabolic SAR is below the price line.

When the price is going up the SAR is formed below the price line and as soon as the market reverses it intersects the upward sloping price line & vice versa.

This function works as long as the market is trending. In non trending market or if the market is stuck in a small range, the parabolic SAR could generate the multiple but premature signals this could result in multiple trades but no big profits as well as losses.

HELPED MAKE ASTONISHING PROFIT OF RS 40,000 IN JUST 3 DAYS

  • In Chart 1, you can find UP trends A,C,E,G,I & Down Trends B,D,F,H

  • Non trending (indecisive trends) zone in BOX 1 & BOX 2

  • The Upward arrow at point 1 indicates that the price has intersected the red dot which is parabolic sar after which the stock kept on moving up for several session.

  • The downward arrow @ point 2 indicates that the price has intersected the dot which is the SAR & kept on falling for several sessions.

  • The green dots developed below the stock price candles indicates SAR ie stop loss levels for the long traders

  • The red dots developed above the stock price candles indicates stop loss level for short traders.

  • At point 9 we recommended Buy on Godrej CP @ 1000 with a stop loss level of 980 on 15thJan 2018. & the stock Surged to the level of 1053 on 19th Jan 2018. Inching towards the stipulated target of 1080.

3 Questions to ask

  • Do you always feel for any trading you expect you should get the early entry point ?
  • Do I have the technical study which gives me early entry & early exit opportunities ?
  • Which study I should use to maximize the profits in my trading ?

Trading Mantra

“The one who enters a position reasonably earlier than others makes the highest profit in a trading setup”

Stay tuned for more such profitable strategies and successful Case studies.

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2018-04-03T07:19:34+00:00