Trading the currency exchange market is one of the best and most important decisions you could make. In this post, we are introducing you to the parabolic SAR based trading system.
The parabolic SAR is a trading system compiled for trading justforex. Most traders prefer to trade metals such as gold, that should not be a problem because the parabolic SAR trading system can be installed on meta trader 4.
That means that this system can adapt to all the pairs offered by your broker on mt4.
Parabolic Sar indicator originates from stocks and securities trading, the indicator itself was developed by J. Welles Wilder. The intent was to find potential reversals in the market prices.
Today traders use this indicator for finding short term momentum of any asset offered on the metatrader4 platform.
Install Parabolic Sar In Your Platform, Your Chart Will Appear Like:
Trading Signals are generated by seven indicators. That is; three arrow indicators and four pivot indicators.
The psychology is easy to understand. when the dots of the parabolic SAR are appearing above-market prices, there is potential for bearish momentum.
When the dots appear below-market prices, there is great potential for bullish momentum.
The pivots are for targets and arrows are for entries. To have a system you need three things; the first one is entry strategy, second is the exit strategy and the third is money management.
Guide Lines For Buying
- The dots of the parabolic indicator must be below prices
- Prices should be in the area of a pivot area
- Enter once an arrow up appears
- Place the stop below the previous swing low or below a pivot area
- Place your target on the next pivot area
- Repeat
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Guide Lines For Selling
- The dots of the parabolic indicator must be above prices
- Prices should be in the area of a pivot area
- Enter once an arrow down appears
- Place the stop above the previous swing high or above a pivot area
- Place your target on the next pivot area
- repeat
Note that money management is essential especially in a system such as this one. Tell us your thought on the comments, cheers!
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