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 Systems. Parabolic 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

Indicators for Scalper with Ema:

100 EMA (Exponential Movin Average);

50 EMA

Stochastic (5,3,3);

Long Entry

1) 50 EMA > 100 EMA.

2) Find significant levels of support.

3) Wait for the currency price to retreat back to the support line.
4) Wait for the stochastic oscillator to trade from below 20 back above 20.

5) Open a long trade.

6) Place stop loss 3 pips below support.

7) Profit target should be at least 7-12 pips.

Short Entry

1) EMA50<100 EMA.

2) Find significant levels of resistance.

3) Wait for the currency price to retreat back to the resistanceline.

4) Wait for the stochastic oscillator to trade from above 80 back below 80.

5) Open a short trade.

6) Place stop loss 3 pips above resistance.

7) Profit target should be at least 7-12 pips.