Wilder's Parabolic Indicator

Home About 1st Futures Broker Managed Futures Broker Managed Forex Broker Online Futures Trading Online Forex Trading Free Demo Accounts Charts, Quotes, News Become an IB

Wilder's Parabolic Indicator

The Parabolic system, as described in technical analyst Welles Wilder's book New Concepts In Technical Trading Systems, is a complete stop-setting entry and exit trading system. The system is designed to allow more leeway or tolerance for contra-trend price fluctuation early in a new trade, then to progressively tighten a protective trailing stop order as the trend matures.

The concept draws on the idea that time is an enemy, and unless a trade can continue to generate more profits over time it should be liquidated. Thus, the Parabolic Time/Price System rides the trend until the SAR price is penetrated. Then the existing position is closed out and the reverse position is opened.

The expression 'parabolic' derives from the shape of the curve the stops create as they appear on the chart (this can be seen when the Parabolic indicator is applied to a data series on a chart window).

To calculate the function, we must first find an extreme reference point. On the long side this price is usually the lowest price recorded during the previous closed short position. On the short side this extreme price is usually the highest price recorded during the previous closed out long position.

In practice, however, you won't have an extreme reference point for the very first trade as there are no previous trades. To account for this, the function uses, as a default, either the High or Low of the previous bar before the first
trade.

Reference:

Wilder, Welles, Jr. New Concepts in Technical Trading Systems. Trend Research. McLeansville, NC

Technical Analysis Studies Available

Bollinger Bands	Moving Average Lines
Commodity Channel Index (CCI)	Moving Standard Deviation Oscillator
Directional Movement Index (DMI)	Wilder's Parabolic
Displaced Moving Average	Larry Williams' Percent R
Envelope	Rate of Change
Exponential Moving Average	Relative Strength Index (RSI)
Highest High / Highest Low	Slow Stochastic
High / Low Moving Average	Stochastics
Historic Volatility	Volume and Open Interest
Least Square Linear Regression	Variable Moving Average
Line Oscillator	Weighted Close
MACD	Williams' Accumulation / Distribution Index
Momentum

You can adjust parameters of each indicator to suit you.

L e g a l

D i s c l a i m e r

THERE IS ALWAYS RISK OF LOSS TRADING FUTURES. THEREFORE,
ONLY RISK CAPITAL YOU CAN AFFORD TO LOSE ON THESE TYPES
OF INVESTMENTS.
1st-Futures-Broker.com is registered with the NFA and CFTC

C u s t o m e r S u p p o r t

1st FOREX Broker, Herndon, VA, USA
Phone: 703-476-4406
Fax: 312-577-0959
Email: Sales@1st-Futures-Broker.com