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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)

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I also use a moving average, mine is 50 SMA - it tells me about a trend. Another one is 14 EMA, I use it for exits.


What is the best stop loss approach to use with this strategy? SL below/above the most recent PSAR dot? Is a conservative SL necessary,especially if you're using an EMA, e.g., 21, 63 or 100, as a filter. Might a different/more aggressive approach, be okay? Any thoughts/ideas?

veeeeeery veeeeeeery late entries

S/L outside the most recent PSAR dot, or, even better outside the last but one PSAR dot.
The entries are very late, yes, but very conservative too.
An aggressive approach would be to take half of the position out at +10 pips and then move S/L to breakeven.


by ema 21 do you mean exponential moving average or relative strength index?

thank you

Exponential moving average.

Hi edward. You mentioned an MT4 script to backtest this was in the offing, any updates on that? Im trying this strategy out, but as with the other posters Id like to try it on historical data as well. Thanks for sharing!

no happy ending this time... I haven't learned MT4 programming yet: lots of plans and little time, unfortunately.