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Forex trading strategy #2 (Parabolic SAR + ADX)

The two indicators we are going to talk about here are found to be very well working when used side by side. This Forex trading system is an another simple discovery; and hundreds of such discoveries can be made when traders are there to learn and experiment.

Any currency pair and time frame can be used.
Indicators: Parabolic SAR default settings (0.02, 0.2), ADX 50 (with +DI, -DI lines)

Entry rules: SELL When the +DI line is below the -DI line, and Parabolic SAR gives sell signal. When the +DI line is above the -DI line, all Parabolic sell signals must be ignored.
Entry rules: BUY when the +DI line is above the -DI line, and Parabolic SAR gives buy signal. When the +DI line is below the -DI line, all Parabolic buy signals must be ignored.

Exit rules: when +DI line and -DI lines have crossed again.


FOREX TRADING SYSTEM


Advantages: allows filtering entries and predicting good exits.

Disadvantages: Both Parabolic SAR and ADX are follow-up indicators. Although they complement each other very effectively, the “weakest” in chain is ADX, because during trading it can give one signal, but later change to the opposite. Once given a signal from ADX, waiting for the current price bar to close to avoid such misleading is advised.



http://forex-strategies-revealed.com/


This strategy is very powerful, i use this beside that i add ema21, run chart on h4 and daily, entry decision on h1, margin used 1%
Thank's

(from Ezra)

Hi everyone,
Thanks for this very good site, very helpfull.
Ezra, can you tell my how you used your ema21 ? To know trend direction ?

Bye

Ok,
I'll try to comment it.
EMA 21 first of all provides a good visual aid, showing trend direction. Also it acts as a confirmation line: if we are ready to sell, the price should trade below 21 EMA, and vise versa, when we got a signal to Buy the price should trade above 21 EMA. Once confirmed, we happily press an execution button.

Happy trading!
Edward.

thank you..much appreciated

Could someone please teach me how to set +DI and -DI? Many thanks in advance.

On some trading platforms -DI and +DI come with ADX indicator.

On others look for DMI (Directional Movement Index) indicator.

edward - you are such a nice and a genuine person.

thanks for sharing all the strategies

sandeep (dadacomputers)

Edward.
DOES IT MEAN THAT YOU CHECK 21ema ON BOTH 4 HOUR AND DAILY CHART BEFORE TRADING OR ON ANY ONE OF THEM