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)
Read entire post >>>
The charting service I have has DMI and ADX as separate indicators. So should I set the DMI to 50 like the ADX?
Thanks
The larger the time frame the less trading signals you get, but those that you get will be the most reliable. With shorter time frames you will get more trading opportunities, but the rate of false signals will increase.
The strategy should work equally well for all time frames.
Start with daily or 4 hour charts, trade them for a while and decide whether they fit your trading style or some changes are needed.
Regards,
Edward
Someone mention the following:
>>USE EMA (63 DAYS) with Parabolic SAR and with ADX (14)
I setup a chart using the above and based on past data it seems that this may work. However, I'm not sure if I should based all my trading on this method using daily charts. Please advise. Thanks.
Try Par SAR 0.01 , 0.1
There will always be some false signals, no matter what trading strategy you use.
Good day Ezra,
can you please advice on the settings of Parabolic SAR on the 1 hour chart when using your own strategy.I need to know because the default setting sometimes gives me false signals.
Hi Lynn,
Yes, you'd need to change the settings to 50 as per original rules.
These rules are based on our own observations. You may certainly change ADX settings at your choice. Take a look at ADX 50 versus ADX 30 versus ADX 14. Whichever one fits your trading style and tells you more about the market should be left.
Best regards,
Edward.
Edward:
I have a question about ADX. This particular strategy requires ADX (50). I am using Metatrader 4 and my default is 14 periods. Do I change the 14 to 50? Is 50 the best setting for all time periods? If not, what do you recommend for the Hourly and 4 Hour charts? Thanks.
Lynn
USE EMA (63 DAYS) with Parabolic SAR and with ADX (14) and earn 50,000 $ a month .... U BET !!!!!!!!!!!!!!!
When these THREE gives same Signal then TRADE ,,,,
UNDERSTAND.......
Now Pray for me ,,, because I m a millianore but i have to find my Dream Girl because u cant buy ur Dream Girl ,, ok
BYE BYEE
ADX 9-20-40 /
period = 9 / horizontal line at 20 / horizontal line at 40 /
all time charts /
ADX upper 20 = TREND /
ADX upper 40 = STRONG TREND /
ADX below 20 = NO TREND /
when ADX is crossing ADXR (the signal) = ENTRY/EXIT POINT (ADX up = buy, ADX down = sell)
(+DI) Positive Directional Momentum Indicator and (-DI) Negative Directional Momentum Indicator - both are a part of ADX and are set when ADX indicator is applied to charts.
The formula for +DI and -DI is not known to me. I'm sorry.
As a solution, you may register a demo account with another broker which has ADX with +DI -DI and use signals from there.
(The screenshot to the strategy is made on OANDA's charts)
Regards,
Edward
how do I calculate the +D1 and -D1
It's better to use longer EMA for entry filter. EMA100 is a good one.
Regards
skltrader
If 21 EMA is to be added, then yes, it is suggested to check daily and 4 hour charts prior to trading.
From my observations, current strategy "likes" smoothly trending pairs. Therefore all x/JPY combination should work well; and again only further testing can be advised for other currency pairs.
Regards,
Edward.
It works on EUR/JPY well but on other pairs the result is not ok. Please does it mean that this strategy is for EUR/JPY only
Edward.
DOES IT MEAN THAT YOU CHECK 21ema ON BOTH 4 HOUR AND DAILY CHART BEFORE TRADING OR ON ANY ONE OF THEM
Post new comment