Testing Parafrac Oscillators with Crossover, Momentum, and Candle Filters
Summary
The article compares an original Parafrac oscillator, which normalizes the gap between Parabolic SAR and price by a fractal range, with an ATR-normalized V2. It describes three proposed entry frameworks: zero-line crosses with a histogram threshold, consecutive histogram changes on one side of zero, and a histogram signal combined with candle confirmation. Stop loss, reward-to-risk ratio, and, for the first strategy, a threshold are optimized separately for each indicator. The stated test market is GBP/USD on H1, from 2021 through 2024, with initial equity of $1,000.
Reported comparisons vary by rule set: V2 performs better on net profit and win rate for the first strategy and has a higher win rate in the second, while the original oscillator performs better with candle confirmation. The article concludes that filtering and execution rules matter more than a universally superior indicator. The supplied text omits portions of the strategy descriptions and results, including much of the third test, and gives no full trade-level evidence. Optimization on one pair and timeframe limits conclusions about robustness or out-of-sample performance.
Key ideas
- Parafrac scales the Parabolic SAR to price gap with fractal range, while V2 uses ATR, so the indicators can produce different signal structures.
- The tested entry rules combine zero-line crosses and histogram thresholds, histogram momentum shifts, or histogram signals with candle confirmation.
- The reported comparison favors V2 for the first strategy, while candle confirmation favors the original oscillator.
- Unfiltered histogram momentum entries are described as vulnerable to excess trades and market noise.
- Results come from an optimized GBP/USD H1 backtest over the stated period and do not demonstrate performance on other markets or unseen data.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.