V.7:11 (411-413): Parabolic stop/reversal by Peter Aan
Product Description
Parabolic stop/reversal
by Peter Aan
There are two primary variables for the system: the acceleration factor (AF) increment and the maximum acceleration value. In a long trade, for instance, the daily computation involves subtracting the current reversal stop from the most favorable point reached in the trade and multiplying this difference by the AF. This result is then added to today's stop to arrive at the reversal point for tomorrow. The general equation is:
...
Every time the market moves into new highs, the AF is increased. As the AF increases, the stop, which will start out rather "loose," will start to track the market more closely. The AF continues to increase with favorable price movement, until it reaches the maximum acceleration value (0.20 is Wilder's original limit), at which time the AF stays at that level regardless of market action.
There are two primary variables for the system: the acceleration factor (AF) increment and the maximum acceleration value. In a long trade, for instance, the daily computation involves subtracting the current reversal stop from the most favorable point reached in the trade and multiplying this difference by the AF. This result is then added to today's stop to arrive at the reversal point for tomorrow. The general equation is:
...
Every time the market moves into new highs, the AF is increased. As the AF increases, the stop, which will start out rather "loose," will start to track the market more closely. The AF continues to increase with favorable price movement, until it reaches the maximum acceleration value (0.20 is Wilder's original limit), at which time the AF stays at that level regardless of market action.
FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.
| Take Control of Your Trading. |
| Professional Traders' Starter Kit |
| All these items shown below only $299.99! |
| Click Here to Order |