Welcome! Dear Traders,you are reading my forex trading experiences. Forex trading is a very profitable and very risky business opportunity. If you are a beginner, calm down,have a cup of coffee, and convince yourself that you need to study hard to win in forex trading. Obviously, the task is not easy as the statistics claim that only 5% traders win in forex trading. If you are determined, serious,and hard working, you can surely be included in the group of winners.

HOW TO TRADE FOREX WITH PARABOLIC SAR TECHNICAL INDICATOR

yourFXguide-Parabolic Sar technical indicator, which is developed by the famous technician Welles Wilder, often known as "stop and reversal system" can be very profitably applied in currency trading. This indicator is remarkable in identifying the trend reversal and patterns of the trend. 

Parabolic Sar technical indicator belongs to the group of trend indicators. The presentation of the indicator is very simple and similar to the fractals indicator. Along this post, I am going to explain the basic interpretation of this technical indicator. Parabolic Sar technical indicator has some dots that appear at the top or bottom of a candlesticks. 

Most basic interpretation of the Parabolic Sar technical indicator is that when the dots appear at the top of the candles, it indicates bearish trend, and when the dots appear at the bottom of the candles, it indicates bullish trend. 

Dots at the bottom of the candles are called the bullish dots. When the dots appear at the top of the candles and market become bearish after that if the bearish trend breaks the price level at previous bullish dot, it is considered to be a strong bearish signal.

Similarly, the dots at the top of the candles are called the bearish dots. When the bullish trend breaks the price level at previous bearish dot, market turned into bullish from bearish and dots already appear at the bottom of the candles, it is considered to be a strong bullish signals. 

Parabolic Sar technical indicator can also be applied to find the effective stop loss level. If a long order is placed according to the above breakout method, the stop loss for the order can be placed at the price level at the first bullish dot. On the other side, if a short order is placed according to the above breakout method, the stop loss for the order can be placed at the price level at the first bearish dot.

I do not prefer Parabolic Sar to be applied to find the profit target, but the long entries can be closed when the bearish dots appear, and the short entries can be closed when the bullish dots appear.

Dear Traders, Hope this small post will enrich your knowledge of trading and speed up you to be a good warrior in the currency trading war. If you have any question regarding this post, you can drop it into the comment section below. I generally respond to your comments within 24 hours.

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1 comment :

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    ReplyDelete

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