Trading Strategy “Parabolic SAR”
Parabolic SAR FX Trading strategy — is a rather risky system that is based on direct signals of the Parabolic SAR , which shows stop and reverse levels.
Features:
1. Simple to follow.
2. Only one standard indicator used.
3. Entry and exit conditions are given directly by the indicator.
4. Indicator lag.
5. Very risky and not always effective.
Set-Up:
1. Any currency pair and timeframe should work.
2. Add a Parabolic SAR to the chart, set its step to 0.05 and maximum to 0.2.
Entry Conditions:
Long position: Enter Long position when the current price touches the indicator from below and it changes its direction.
Short position: Enter Short position when the current price touches the indicator from above and it changes its direction.
Exit Conditions:
Set StopLoss directly at the indicator level — above the price for Short positions and below the price for Long positions. Adjust stop-loss with each new bar.
TakeProfit should be set to the same value as StopLoss but you shouldn’t adjust it.
= As you can see on the example chart above, there are 6 entry points. The first one is bullish and leads to a profit. The second one is bearish and also reaches TakeProfit level. The third one is bullish and is a complete loss, as is the fourth one, which is, of course, bearish. The fifth one doesn’t reach TakeProfit level but it closes with only a minor loss; it’s bullish. The sixth one is a short position and has already reached its recommended TakeProfit =
Trading Strategy “Parabolic SAR”,