- Parabolic SAR and
Currency Pair: Any
PARABOLIC SAR AND MACD FOREX TRADING STRATEGY RULES
- Wait for MACD line to cross-over. Once The MACD lines have crossed over then to to second step.
- Look To See If the Parabolic SAR has also switched position on the chart. If It does so then go to third step.
- Place A Buy stop/sell stop order above the high or low of the candlestick at the point where both the MACD & Parabolic SAR confirm trade entry signal.
- Place stop loss below the low or high of that candlestick-anywhere from 5-30 or so pips depending on what timeframe you are using as well-the larger timeframe you use, the stops may be a bit larger so you need to adjust your risk per trade accordingly.
- Exit The Trade when an opposite trade entry signal is given
DISADVANTAGES OF THE PARABOLIC SAR AND MACD FOREX TRADING STRATEGY
- in a ranging (sideways) market, you will get too many false signals which will cause you to get stopped out frequently.
- The MACD & Parabolic SAR are both lagging indicators so your trade entries are based on lagging information when price would have made a big move already and sometimes, at the spot and time where you enter, the price may be doing a temporary reversal.
- you stop loss may be quite large because if you place your stop losses quite close, you may get stopped out frequently.
ADVANTAGES OF THE PARABOLIC SAR AND MACD FOREX TRADING STRATEGY
It is a very simple and easy forex trading strategy to use especially for beginner forex traders
- you can easily spot the trade setups happening
- in a nice trending market, there’s potential to make a lot of profitable pips.
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