Forex trading strategy #2 (Parabolic SAR + ADX)
Submitted by Edward Revy on February 28, 2007 - 15:01.
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)
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I´m so happy now.I will try it! Thanks!!!
Decent strategy. I've been trying it out on 15 minute charts, with six different majors so far.
I added the 62 EMA (trade according to the trend), full Stochastic (14,3,3) to make sure not oversold/overbought against my desired position, and MACD (waiting for histogram to flip to agree with my desired position).
I try to find currencies with relatively high volatility. I place orders ONLY when all indicators are filled and the ADX recently crossed having gotten at least 2 SAR indicators in the position I want to take.
Target profit 15-25 pips (depending on currency pair), stop loss 10-20.
Success rate so far has been around 80 % of trades.
-Steffen
Yes, unless you have a plan for entering on a pullback & with it don't mind missing a trade.
Regards,
Edward
so is better to start at the first dot?
We can enter as soon as all signals are in place: +-DI an SAR.
If it's not the first SAR dot, you may consider no skip the trade, or if you know how to trade on retracements (with Fibonacci or other methods), you can set a pending entry order on a pullback rather than opening an immediate market order.
Best regards,
Edward
So we must enter when the SAR starts to show red or green dots or we can enter after a few dots already were shown? I think is better at start because of indicators lag...
Has anyone tried trading this on the 6E using a tick chart? I have been trying it with the parabolic at .015 and .15 The ADX at 14, using a 121 tick chart I know its not Forex but is semms to work great!
Hi edward this is njoki again av just tried using sar with 0.02 and 0.2 settings with adx at 4 instead of 50 and its giving good exit signal as someone had suggested av also seen like the 55 ema gives better trend direction in 1h chart if price is aboce 55ema then only buy signals and sell if price is below 55ema thenx again for all the wonderful strategies i would like to hear if there are anyother improvements on this strategy seems like its still working after all this years since u posted it.thenx again for helping people God bless you.
thenx edward the startegy is simple and really awesome have u come up with a good exit startegy coz waiting for the crossover takes away some pips otherwise the startegy is really simple thats what i was looking for a simple startegy that doesnt fill my charts with indicators
njoki
Hi billy,
You're right. SAR dots below the price should be a Buy, above - Sell.
On which page did I make that mistake..?
Thanks for noticing!
Best regards,
Edward
Hello Ed: Question ... You said about Parabolic, (When the sar dots are above price,
it is a buy, when parabolic is below price it's a sell, isn't this reversed to
what it should be. thanks billy
great
I haven't heard about different ADX formulas...
On MT4 you'll need two indicators: ADX + DMI (to see the green-red line crossovers).
Regards,
Edward
This strategy looks great, but please tell me, can it be used on the mt4 platform, because I read on the internet that on the mt4 platform they calculate the adx differently?
Don't know why people like this strategy.. Have you guys done any testing? More false signals than good ones...
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