1# Parabolic and Volume Trading System

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The Parabolic Time/Price System is another idea that Welles Wilder introduced in his book New Concepts in Technical Trading SystemsParabolic was designed as a stop-and-reverse system, which means that a trader using Parabolic would always have either a long or short position in the market. When Parabolic generates a buy signal, for example, a rising series of dots appears below current prices. As the market moves higher, the dots rise also, first slowly and then more rapidly. When the trend stalls or begins to reverse, the dots and prices meet, the long position is closed out, and a new short position is initiated. For this system, we wanted to find out if adding a volume requirement toParabolic entries would improve Parabolic's performance. Our setup to buy is a high reaching the Parabolic dot above the market with volume greater than a five-bar simple moving average of volume. Both conditions must be true on the same bar.

Setup

a) Calculate the Parabolic.

b) Calculate the five-bar simple moving average of volume.

Long Entry Position

a) The setup to buy is a high reaching the Parabolic dot above the market with volume greater than its five-bar simple moving average.

 

Short Entry Position

a) The setup to sell short is the low reaching the Parabolic dot below the market with volume greater than its five-bar simple moving average.


Exit Orders

a) For a long position, the exit is a decline to the Parabolic.

b) For a short position, the exit is a rally to the Parabolic.

c) For a long position, the Parabolic series below the market serves as the trailing stop.

d) For a short position, the Parabolic series above the market serves as the trailing stop.

e) We'll also enable a money-management stop.

Take Profit: 60 pips EUR/USD, 70 pips GBP/USD 4H Time Frame, for Daily time frame 200pips EUR/USD , 250 pips GBP/USD (recommended).


 

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Comments: 2
  • #2

    Kerry (Sunday, 27 December 2020 08:29)

    The price never reaches the parabolic dot above the market and the same in reverse for the low.
    What is the actual price trigger??

  • #1

    Obed (Wednesday, 01 April 2020 19:43)

    Thanks for your good support for beginners Trader like me, but sir, the “Parabolic and Volume Trading System” could not be found. Can you kindly upload here or you can send it to me gmail (Akposobed6@gmail.com)
    Thanks

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