2000issue C091-6
Treat volume-price imbalance as a hypothesis and let Parabolic SAR hold the exit
On-balance volume can flag when a running volume total makes new highs or lows while price fails to move in proportion. The archive keeps that reading as an entry and confirmation tool and pairs it with Parabolic SAR so a retracement after a volume breakout need not force an exit unless the parabolic stop is hit.
- On-balance volume assigns an entire session's volume to a running total according to whether the close is above or below the prior close.
- A volume-price hypothesis forms when On-balance volume sets new highs or lows while price fails to move in proportion.
- On-balance volume is an entry and confirmation tool, not a standalone exit. Parabolic SAR is paired with it so a retracement after a volume breakout need not force an exit unless the parabolic stop is hit.
- The same Volume-price analysis and Parabolic SAR combination is shown as usable on 30-minute bars as well as daily or weekly data.
How the running total is built
On-balance volume assigns an entire session's volume to a running total according to whether the close is above or below the prior close.
An alternative volume assignment uses the location of the day's dominant force rather than the up-or-down close alone.
When volume and price disagree
A volume-price hypothesis is formed when On-balance volume sets new highs or lows while price fails to move in proportion.
A break of a prior major On-balance volume extreme is treated as a warning that a larger price move may follow.
On-balance volume is presented as an entry and confirmation tool rather than a standalone exit rule.
Parabolic SAR as the separate exit
Parabolic SAR is paired with On-balance volume so a retracement after a volume breakout need not force an exit unless the parabolic stop is hit. Volume-price analysis stays on the hypothesis. The parabolic stop decides whether the idea is still open.
The same pairing on shorter bars
The same volume-price and parabolic combination is shown as usable on 30-minute bars as well as daily or weekly data.
All readings on this track · 21 readings
- 1987Constructing parabolic stops and cycle-window averages
- 1989Evaluating always-in parabolic SAR trailing stops
- 1993Constructing parabolic time-price trailing stops
- 1995Constructing parabolic SAR as an accelerating trail
- 1995Constructing a noise-buffered parabolic trailing stop
- 1997Constructing a parabolic trailing stop that only tightens
- 1998Triangle breakouts filtered by an exponential average and exited with parabolic stops
- 2000Treat volume-price imbalance as a hypothesis and let Parabolic SAR hold the exit
- 2002Constructing volatility stops from average true range and parabolic SAR
- 2002Parabolic SAR construction from stop outputs to reversal signals
- 2002Always-in-market SAR trail with directional confirmation
- 2004Forex trend confirmation with Average Directional Index, Parabolic SAR, and trendlines
- 2006Permission and fill gates for mechanical systems
- 2008A Relative Strength Index channel for profit lock and a trailing stop for capital protection
- 2010Building loss limits from the parabolic stop-and-reverse plot
- 2015Dual-zone currency indexes filter parabolic SAR signals
- 2016A parabolic trailing stop is not a complete system
- 2019Assigning jobs in a stochastic, parabolic, and moving-average stack
- 2019A three-filter stack as a redundancy test
- 2020Mechanical Parabolic SAR as an always-in flip after a breakout
- 2020Layering Relative Strength Index, MACD, and Parabolic SAR onto relative rotation maps