While backtesting during the Training Set Flat market we were surprised with the results: could it be possible to find the best strategy to trade while market is consolidating? It was hard to find the entry points with these indicators — once one of them show it is time to enter the trade, another one shows the reversal signs. Check the ratio between the trades and the period — during the most of the backtesting sessions, it took about the month or so to perform the needed quantity of the trades.

Parabolic SAR itself is an amazing indicator; and you should definitely try different combination of it with other indicators. But to show that even the slight details of the any trading strategy should be carefully backtested before being used during the live trading. There are dozens of the ways to trade the indicator alone or with the combinations with other ones. We show only one way to trade, however, nothing should stop the curious minds to try different settings and check how it can influence the final results.

As you can see, adjust, test and then change accordingly — is the only possible way to find the options suitable for YOU. As you can see, backtesting is quite simple activity in case if you have the right backtesting tools. The testing of this strategy was arranged in Forex Tester with the historical data that comes along with the program.

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In addition, you will receive 20 years of free historical data easily downloadable straight from the software. What do you think about the strategy as whole and Parabolic SAR as an indicator particularly? Forex Tester is a software that simulates trading in the Forex market, so you can learn how to trade profitably, create, test and refine your strategy for manual and automatic trading.

Forex historical data is a must for back testing and trading.

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Forex data can be compared to fuel and software that uses this data is like an engine. Quick and simple tool for traders to structure their trading ideas into the EAs and indicators. EFB helps traders save time and money. Get trade-ready strategies and indicators right away with NO coding skills required! We'll help you become intelligent Money Managers and gain you entry into the elite group that actually makes money trading Forex.

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Software to copy trades between accounts. Software that opens trades in a fraction of a second with a built-in risk management calculator. We appreciate your interest in our interactive educational course. Look out for our email. ES JP. Toggle navigation. Therefore, the change of the dots position indicates the potential reversal may happen. That is another reason why traders single out this indicator into the top of the favorite ones. Timeframe: any but we use 1h while backtesting.

Currency pair: any. Long trade entry rules: Parabolic SAR dots must be below the price. Enter the Buy trade at the next candle after these two conditions met. Conclusions Probably, something is wrong with the chosen settings or the risk management: while showing the optimistic results during the Training Set, the forward testing showed the negative results unfortunately. Surprisingly, this strategy showed positive results only during the Flat markets. One more thing about this strategy during the Flat markets worth mentioning: It was hard to find the entry points with these indicators — once one of them show it is time to enter the trade, another one shows the reversal signs.

But, again - no surprise for trading during the flat markets. The indicator just looks parabolic on the chart.

• Parabolic SAR EA?
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• My Parabolic SAR Secret Strategy - Advance Forex | Forex trading, Forex, Forex system!

The parabolic SAR is a hybrid indicator that combines direction of trend with strength of trend i. To that you add an Acceleration Factor AF that starts at 0. The maximum the AF can reach is 0.

1. How to Use the Parabolic SAR Indicator to Trade the Trend?
2. Moving Average With Parabolic SAR Forex Trading Strategy!
3. The Parabolic SAR indicator analyses trends and shows reversal levels - Admirals!
4. Currency Exchange Rate Chart for QAR.

In an uptrend, the parabolic SAR trails along under the price bars and moves up with every new bar. The indicator is demonstrated on the chart below.

Saudi Riyal

The parabolic SAR is a single number and therefore is displayed as a dot. On this chart, the blue dots are the parabolic SAR values. Notice that the parabolic SAR is triggered on the third period after a highest high, signifying that the new low is a starting point for the reversal move, and now we should consider the Acceleration Factor to be moving in the opposite direction downward.

Now the parabolic SAR dots are above the price level, denoting that if the price reaches a dot, the downmove has ended and you should stop-and-reverse back to long. Every software package and charting website offers the parabolic SAR as a standard feature, so you do not really need to know how to calculate it by hand. What you do need to know is that the standard acceleration factor is 0.

In Forex, if you reduce the acceleration factor to 0. Research indicates the conventional parameter of 0. Because you do not know the next open, it can be handy to have a stop all wrapped up with a bow before the next session begins. You can use the parabolic SAR as your own stop until you have more information based on fresh data. The other useful feature of the parabolic SAR is that it warns you to remember that trends can be very short-lived.

Parabolic Stop and Reverse (Parabolic SAR) Indicator Explained

While parabolic SAR is a lagging indicator, it has a forward-looking capability in that it is intolerant of pullbacks and will generate a reversal when you may think the move is on-going. The move may well be on-going, but the parabolic SAR has a philosophical assumption that only a move that is continuing to go above the latest SAR reading is worth your time and capital.

Another interesting characteristic of the parabolic SAR is that when you draw support and resistance lines by hand, they often line up with the parabolic SAR dots. The problem, of course, is that parabolic SAR works best in trending markets and will generate a lot of whipsaws in a range-trading or high-volatility choppy market. A sedate, tidy set of price bars on a daily chart can be a nightmare of choppiness on the minute or minute chart. Unfortunately, if you like to look at prices on multiple timeframes, you will get very different parabolic SAR dots.

The prices shown in the two charts above are on the same minute chart. Now look at the same prices on the daily chart below. In this timeframe, parabolic SAR has not given up yet and would have you remain long — although notice the lowest low of the last bar is very close to the last dot. This daily chart also includes the Bollinger band.

My Parabolic SAR Secret Strategy - Advance Forex | Forex trading, Forex, Forex system

As we observed in the lesson on Bollinger bands , in Forex, a break of the Bollinger band often — very often — is followed by a pullback. So now you have a puzzle to solve. On the minute chart, the parabolic has you stopping and reversing.