create your own

#2 Forex trading strategy (Parabolic SAR + ADX)

65
rate or flag this page

By swanlin


The two indicators you will use here are found work effectively when used side-by-side. This Forex trading system is an another simple strategy.

You can be use this on any pair and any timeframe.
Indicators: ADX 50 (with +DI, -DI lines), Parabolic SAR default settings (0.02, 0.2)

Entry rules: You should sell when the "+DI" line is below the "-DI" line, and Parabolic SAR is giving a sell signal. When the "+DI" line is above the "-DI" line, the Parabolic sell signals must be ignored.

Entry rules: You shoule buy when the "+DI" line is above the "-DI" line, and Parabolic SAR is giving buy signal. When the "+DI" line is below the "-DI" line, the Parabolic buy signals must be ignored.

Exit rules: You should close the trade when "+DI" line and "-DI" lines crosses again.

Note: The higher the ADX is, the stronger the trend is. If ADX has reached 25, there is a good strong trend is in place.


Disadvantages:

ADX and Parabolic SAR are both follow-up indicators. Even though they complement each other very well, the weak factor here is ADX, because it can give out a signal, but change its mind later on. Once a signal is generated from ADX, it is advisable to wait for the current price bar to close to avoid false moves.

RSS for comments on this Hub

No comments yet.

Submit a Comment

Members and Guests

Sign in or sign up and post using a hubpages account.


optional


  • No HTML is allowed in comments, but URLs will be hyperlinked
  • Comments are not for promoting your hubs or other sites

working