How To Use Parabolic SAR Indicator Effectively to maximize your trading profits. One indicator that can help us determine where a trend might be ending is the Parabolic SAR (Stop And Reversal). A Parabolic SAR places dots, or points, on a chart that indicate potential reversals in price movement.
The nice thing about the Parabolic SAR is that it is really simple to use. We mean REALLY simple.
- Basically, when the dots are below the candles, it is a BUY signal.
- When the dots are above the candles, it is a SELL signal.
Forex Parabolic SAR (Stop And Reversal) Trading Rules
Parabolic SAR is probably the easiest indicator to interpret because it assumes that the price is either going up or down. With that said, this tool is best used in markets that are trending, and that have long rallies and downturns.
- Price upward above Parabolic SAR Dots
- DSL-Oscillator upward (grey or green color)
- MACD that crosses upward and above 0 line
- Signal Trend Indicator green color
- ASCT Trend Signal yellow color
- Price downward below Parabolic SAR Dots
- DSL-Oscillator downward (grey or orange color)
- MACD that crosses downward and above 0 line
- Signal Trend Indicator red color
- ASCT Trend Signal magenta color
Parabolic SAR Trading Notes:
- DON’T use Parabolic SAR in a choppy market where the price movement is sideways.
- You can also use Parabolic SAR to help you determine whether you should close your trade or not.