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Thread: Parabolic SAR Indicator

Parabolic SAR (PSAR) indicator was developed by J. Welles Wilder.

#PSAR #Indicators #Definedge

 The calculation of this indicator is a bit complex, but the concept is extremely useful. I will try to simplify it and explain the logic. I will briefly explain the concept, calculation and reading.

Let us think about creating an indicator that shows the trend.
Using the indicator, we can identify & ride the trend using the trailing stop-loss method.

For trailing the stop in uptrend, indicator needs to be placed below the candle. Similarly, it should be placed above the candle for trailing in a downtrend. We will plot it using ‘dots’.
So, the indicator & stop-loss will be rising in uptrend & falling in downtrend.

Let us define the trend as:

If Low of the candle > Stop-loss level in bull market = Trend remains bullish.

If High of the candle < Stop-loss level in bear market = Trend is bearish
Imagine you are driving a car on highway; you would like to accelerate if the road is clear. You will slow down if the road is bumpy.
Same concept is applied here.

The indicator rises steadily if the trend is steady. If the trend is strong the indicator should accelerate, it should move faster and stop should get trailed aggressively.

What is strong trend?
Strong?
In a bullish trend if price makes a new high it is a strong bullish trend.
In a bearish trend, if price makes a new low it is a strong bearish trend.

Period?
Period for new high: since the indicator turned bullish
Period for new low: since the indicator turned bearish
Hope concept is clear.

Calculation of PSAR: EP, AF and PSAR

Extreme Price (EP) is calculated on every candle.

‘High’ price in bullish market and ‘Low’ price in bearish market is called as Extreme Price (EP).
If Bullish trend:

If new high is made -> EP = New High price
Else
EP = Prev High

If Bearish trend

If new low is made -> EP = New Low price
Else
EP = Prev Low

Period of new high or low is explained earlier.
Wilder created a method of calculating Acceleration Factor (AF) for the indicator:

> Accelerate it by 0.02 if trend is steady.
> Add 0.02 to previous speed if trend is strong.
> Maximum acceleration will be 0.20.
A = Different between extreme price and PSAR indicator price

Multiply Acceleration factor by A and add it to the previous stop-loss, you get new PSAR indicator reading.

PSAR = A x AF + Previous PSAR reading
Have a look at below image. Pink dots show PSAR indicator.

Phase A is when indicator moving at a steady speed. Phase B is when trend is strong (New high in bull market, new low in bear market) hence, PSAR is accelerating with a greater speed (0.02 being added) during B.
So, the basic reading of the indicator is:

Trend is bullish when price is above the PSAR, it is bearish when price is below PSAR. You can use it as a trend filtration method.

Indicator accelerates during strong trends. Hence, rising PSAR and Falling PSAR are also important.
The indicator is also used as a Stop & Reverse (SAR) trading system.

When trend changes, the length of the stop-loss depends on the previous high or low. Avoid the signal if initial stop-loss is not affordable. Wait for the pullback pattern that provides better risk-reward trade
I wouldn’t say PSAR is a good sup-res indicator because it’s a mathematical calc. But it offers pullback trade opportunity with better risk-reward when price comes near the indicator during strong trends.

It can be used alone or combined with other studies to design the system.
We discussed about AMA and Super trend indicator which uses similar concept. They go flat when trend is not strong. PSAR increases steadily if trend is not strong and moves fast when it is strong.

Below are some Important things about PSAR indictor:
Imp features:
• Unlike many other indicators, you do not have to define the look-back period, define the acceleration factor
• It does not use method of averaging
• It uses high, low prices to determine the trend and stop-loss level
• Indicator accelerates if trend is strong
Indicator is useful & applicable on different timeframes. 0.02 and 0.20 are recommended settings to being with. I like to explore it on Noiseless charts, objective price patterns are advantage there. Change max AF to 0.10 if you want to use it in Renko. I will talk more about it.
Is it a ‘leading’ or ‘best’ indicator? Its different & useful. ‘Leading’ comes at a cost, ‘Lagging’ can b useful as well. Major issue wid learning in d field of trading is that everything is associated wid trading it immediately. Focusing on concept would bring long-term success!

More from Prashant Shah

Prashant Shah
Prashant Shah
@Prashantshah267
Thread: Darvas Box Theory

#Darvas #knowledgesharing #Definedge


Nicolas Darvas (1920 – 1977) was a professional dancer and he travelled around the world. He founded a Dance company in 1950s. Someone offered him shares against his Dance programme and that is how he came across stock market and the business of trading.

He reportedly turned thousand dollars into millions in the late 1950s.

He wrote a popular book during 1960 “How I made $2000000 in Stock Market” in which he explained his Box theory. It is a must read.

He used a combination fundamental and technical approach for investing.

He believed in investing in only growth stocks. I think he did not explain a few things in his book, and I found some difference in interpretation of box-theory at various places because of that. This post is my interpretation of his theory.

Darvas was tracking stocks only making new high. I do not think he really talked about 52-week high. He mentioned about stocks breaking 2-3 year high. But 52-week high is mostly tracked for this theory so let us keep it that way to begin with for the sake of objectivity.
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Prashant Shah
Prashant Shah
@Prashantshah267
Thread: Alligator indicator

#Alligator #Indicators #Definedge


Alligator indicator is created by Bill Williams. He was a popular trader and author.

Before we discuss the indicator, let us understand an important concept.

Here is a chart showing 10 day moving average at bar A. Price of the stock is 100, Moving average price is 90.


What if we shift this moving average to 5 bars further? See the chart below.

Moving average at bar B is moving average price of bar A (5 candles behind). This is shifting of moving average price. What does it mean?


Simple explanation is – shifting the moving average can help one compare current price with past period moving average easily. It results in smoothening instead of increasing the moving average parameter. This is also known as Forward Displaced moving average.
STOCKSLEARNINGS , ALL , MARKETLEARNINGS
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Prashant Shah
Prashant Shah
@Prashantshah267
Thread: Central Pivot Range (CPR)

CPR is another popular tool. Three lines are plotted on the chart when we plot CPR.

The three lines are: CPR, TC and BC.

Let’s understand the calculation.


You may recall that I explained the calculation of Pivot levels in an earlier thread. CPR stands for Central Pivot Range. It is always a center line of the three lines that gets plotted in the chart.

CPR is a Pivot price. Pivot is average of HLC as explained in the prev thread.


We also discussed about Mid-range of the session. Mid-range is average of High and low price of the session.

The mid-range of the bar is known as BC in the CPR calculation. BC stands for Bottom central pivot.


Pivot level captures the relationship of the closing price to the range of the session.

Pivot price above mid-price = bullish pivot
Pivot price below mid-price = bearish pivot


So, CPR line is Pivot and BC line is Mid-range.

What is the difference between both?
Mid-range is average of High and Low.

Pivot is average of High, Low and Close.
What will make the difference between the two?

Close.
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Prashant Shah
Prashant Shah
@Prashantshah267
Nifty and RSI divergence. It is all about knowing your indicator well. Quick video (Hindi) :-)
STOCKLEARNINGS
Prashant Shah
Prashant Shah
@Prashantshah267
Back-testing of some candlestick patterns 🧵

I hv back-tested patterns shown below on 500 stocks (Nifty 500 stock group as on today) since inception on daily timeframe charts.

Below is some interesting information.


I was doing to design multi-chart setups. But the information in the thread can be useful for people practicing candlestick chart patterns. There are many patterns & we keep coming across more. The data can give you a rough idea about the past performance of patterns.

Patterns are defined based on the popular rules of identifying them. I have also tested bearish patterns for bullish trades and vice versa (Contra approach).

Criteria: Hit ratio & returns of pattern giving 1:1 risk-reward if the entry is at the closing price of the pattern.

Some top bullish patterns have below hit ratio:

Inverted Hammer or Shooting Star – 74.72%
Multi-Harami breakout - 65.23%
Bullish Harami cross – 64.6%
Bullish Kicker – 63.53% (Got better returns)
Bullish separating line – 61.69% (It has got better returns)


Doji breakout hit ratio is decent (63.71%) but occurrences are v high so need more confirmation.

Engulfing and Harami patterns have got better returns when traded at next candle of confirmation.
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Anarchist \U0001f4a3Federation \u2764\U0001f5a4
Anarchist 💣Federation ...
@AnarchistFed
While watching the GameStop stuff has been mildly hilarious (I mean who doesn't like watching the financial elite squirm?) it's pretty clear that a whole bunch of folk have convinced themselves this is ACTUALLY some kind of revolutionary activity. It isn't. 1/


Sure, it's highlighted yet another way in which the bastards profiteer but that's about it, stick it on the pile with the fifty other pro tips to keep the poor, well poor... It's todays banter and tho a few folks might have egg on their faces, literally nothing will happen. 2/


GameStop's three largest shareholders have earned £1.5bn+ during this. They sit at the top of some 200 institutions which are rolling. Meanwhile the ersatz rebels are now watching the bubble, realising there is profit to be made and having a wibble. 3/


No doubt some TRULY believe they are taking part in some kind of revolution but frankly it's utterly absurd and the vast majority are in it for the lulz and to cash in quick.

I'm sorry to tell you this, but you don't own GameStop.

4/


The reality is, the scale of the economic disparity and corruption is simply vast. Billionaires loosing a few millions means nothing. They buy one less yacht and you continue to live meal to meal.

The "Free Market" changes a few systems and the abuse continues. 5/
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Trader knight
Trader knight
@Traderknight007
A thread on Pyramiding-


What is pyramiding?

In pyramiding we add on to a position when it is going in our direction. Its basically opposite of averaging down.

MOMENTUM - Success of a pyramiding trade depend on this ingredient, the more the momentum the better pyramiding.


There are many way to enter and exit in a stock-

1. ALL IN - ALL OUT
2. ALL IN - SCALE OUT
3. SCALE IN - SCALE OUT
4. SCALE IN - ALL OUT ( I use this one)

Why traders use Pyramiding ?

More than anything what pyramiding do is keep your losers small and your winners - Big.

Pyramiding in my view keeps your dd smaller as your losers are very small because you enters with only a fraction of what you would have entered Normally.

BUT, not necessarily it should be more profitable than ALL IN- ALL OUT, Where one enters all at once and sell all at once.

HOW TO DO PYRAMIDING-

There are various methods which are used by traders for pyramiding ,while keeping the basic concept of adding onto the strength.

1. PYRAMIDING AND TRAILING BASED UPON STRUCTURE-

In this method we scale in or pyramid the qty when the stock breaks above
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Hermann Peterscheck
Hermann Peterscheck
@petershk
For fun I made a Robinhood account. It took me 5 minutes to sign up, get approved and transfer funds for trading...

Here's some details... Read on.

...it took me another 5 minutes to get qualified for options.

If I share a sign up I get "free shares" and I can share as much as I want up to 500$ worth.

The main UI has a prepopulated "list" of stocks/crypto to watch and links to news.


Clicking a stock opens a "trade" button that looks like this.

Notice options is first, buy second.

Options took me to an approval process (which took about a minute) and now away I go trading Baba options.


Buying stock looks like this. It emphasizes fractional shares.
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Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
Working on some execution optimisation related backtesting. I have so far been executing with market orders only. Going towards higher lot sizes, I'd like to optimise for minimal slippage.

First off, on NSE, if you place a market order, you get filled at the best bid/ask right?

If we want to optimise this, the first non-creative idea one can think of is, slicing the order into different lot sizes, and placing a limit order for each slice at the mid point of current best bid & ask.

But this requires your latency to be the least.

Why would latency affect it?

I looked at tick historical data, and there are more than 18-20 ticks in a second (auction and quote combined).

Even if you keep 10 ticks per second, your best bid/ask can shift from the time you place to the time exchange receives the order.

So, the next best thing that people can do is place tranches of orders every 1s, 3s, 5s, 10s, 15s - in their preferred time range, and get filled at the midpoint or best-bid+1/2/3/4/5 in the depth.

What you need is liquidity.

But if you're trading breakouts, then it's highly likely that your limit orders may not get filled if the action is too fast.

So, a retry mechanism is required in such cases.

If nothing works, you convert your orders to marketable and get filled at worse slippage.
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Trader knight
Trader knight
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"90% of the traders lose money, But do they lose it all the time?"

Most of them do make money, its just that they give it all back.

Lets analyze why and how a trader makes and loses money
[Thread]:

Below is the equity curve which is most traders dream.


This is equity curve of an average trader:

Most traders do make money, but they give it back to the markets .

Because of trading errors.

What are trading errors?


Trading errors are those errors which happen because of wrong Position sizing, Leverage , etc.

I am not making this up, check your P&L, 90 % of your losses would have come from less then 10% trades.

Most of these happen because of No knowledge, No plan, bad position sizing .

Now, we know what's the problem, lets talk about the solution.

1. Learn the Basics first-

If you don’t get the basics clear then how can you make money?

Learn How to use Support and resistances
Learn How to use trend lines
Learn about trend, it will solve 90% of your problem
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Billy Bostickson 🏴👁&👁 ...
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Keep dwelling on this:
Further Examination of the Motif near PRRA Reveals Close Structural Similarity to the SEB Superantigen as well as Sequence Similarities to Neurotoxins and a Viral SAg.

The insertion PRRA together with 7 sequentially preceding residues & succeeding R685 (conserved in β-CoVs) form a motif, Y674QTQTNSPRRAR685, homologous to those of neurotoxins from Ophiophagus (cobra) and Bungarus genera, as well as neurotoxin-like regions from three RABV strains

(20) (Fig. 2D). We further noticed that the same segment bears close similarity to the HIV-1 glycoprotein gp120 SAg motif F164 to V174.
https://t.co/EwwJOSa8RK


In (B), the segment S680PPRAR685 including the PRRA insert and highly conserved cleavage site *R685* is shown in van der Waals representation (black labels) and nearby CDR residues of the TCRVβ domain are labeled in blue/white
https://t.co/BsY8BAIzDa


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https://t.co/BsY8BAIzDa
Y674 - QTQTNSPRRA - R685
Similar to neurotoxins from Ophiophagus (cobra) & Bungarus genera & neurotoxin-like regions from three RABV strains
T678 - NSPRRA- R685
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One fascist to watch in 2021 is Joseph Charles "Oakman" Golinske of SE MI. He's been a Proud Boy for a couple years, but took a break recently from the group and promotes himself through the "Oak Nation" channel on Telegram.


Most people may be familiar with him as the tall guy in the Proud Boys bridge shot, from their August 17, 2019 attack on Portland, which featured an American Guard bus trying (and failing) to bludgeon antifascists with hammers.


He was also with his g/f at the time (Dominique Tota, left of Tarrio), and that's definitely a twitter account folks will want to block/report because he posts on it.


He's been plenty active at the pro-Covid/anti-mask/ReOpen protests in Lansing MI, seen here with Jerry Wayne and an effigy of Gretchen Whitmer, who his militia friends tried to kidnap and publicly execute.


Outside of the Proud Boys, his solo "career" with Oak Nation features the same misogyny, classism and gateway to far-right domestic terrorism the Proud Boys themselves feature. Here's him peddling oxychlorinque and bragging about harassing service workers.
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WORLD OF SANATAN DHARMA
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LESSER KNOWN DETAILS ABOUT THE BATTLE OF PRATAPGAD - THIS YOU ALL SHOULD READ

In the 1659 Adilshah sent Afzalkhan with the army of 75000 soldiers to destroy Chhatrapati Shivaji Maharaj with his empire. He was the main soldier, warrior and minister in Adilshahi Sultanate.


He was the Subhedar of Wai province.

He was very powerful physically. His height was 7.3 ft. due to same he was very popular as a strong man from Adilshahi Sultanate.

Whole India was not daring to fight with Adilshahi due to Afzal Khan.

Badi Begum Sahiba sent him to kill Chhatrapati Shivaji on any cost.

Voluntary he decided to destroy Chhatrapati Shivaji’s empire with him. He started his operation against Chhatrapati Shivaji from "wai". He destroyed many temples like as Tulja Bhavani Temple.

He destroyed so many villages, killed villagers to torture Chhatrapati Shivaji.

DETAILED VIEW- Running commentary

1. Chhatrapati Shivaji chose Pantaji as a lawyer to communicate with Afzal Khan. Pantaji was very sharp minded, who did his job very nicely.

2. He presented Chhatrapati Shivaji is fearing Afzal Khan and he wanted to invite him in his kingdom near Pratapgad.

3. Pantaji succeed in the communication with Afzal Khan and he brought him as per the planning of Chhatrapati Shivaji.
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I'm going to attempt to chronologically list all of the Marvel characters Stan Lee had a hand in creating. Working with his genius collaborators, Stan and his team produced an insane amount of iconic characters in a roughy ten year period. (Thread)


With his younger brother, writer Larry Lieber, and Jack "the King" Kirby:

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With writer Lieber, and artist Kirby:

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With the King, Stan gives birth to the Marvel Universe:

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Fantastic Four #1 (November, 1961)


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💬 I often get Q’s like these:

How did you get your first customers for WIP? How did you grow BetaList’s traffic? Etc.

Makers are looking to reverse-engineer success. I see it everywhere.

I don’t think it works that way and the answers to those questions are mostly useless. 💥

I have built dozens of different products over the last couple of years. The vast majority failed. 😭

Surely if I know the answers to these questions, but still fail over and over again, these answers aren’t that useful. 🤷‍♀️

So what’s a better question to ask? 🤔

99.9% of the questions I receive are about the products that did well. In a way that makes sense, because we quickly forget about those that didn’t succeed.

🧠 This is known as survivorship bias.

Focusing on what survived, while ignoring what made it survive in the first place.

The real question, what you really want to know, is this:

What makes @WIP, @BetaList, and to some extent @AllStartupJobs succeed where my countless other attempts failed?

What separates a failed product 👎 from a successful product 👍?

Honestly, I don’t know. I wish I did.

It’s like Steve Jobs said “I’ll know it when I see it.” 👀

Same is true when we make products. We don’t know upfront what will work. But once we see an inkling of a product that does have potential, it’s not that hard to spot.
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