Parabolic SAR Trading with EMA, ADX, and SLOW STOCHASTIC Indicators

The Parabolic SAR (Stop and Reverse) indicator is represented by a series of dots that appear above or below the price bars on a chart, and it helps traders determine whether the price is moving up or down.

The Parabolic SAR indicator uses the previous price action and the current period’s high and low to determine where the dots should appear.

• If the dots are below the price bars, it means the trend is up.
• While dots above the price bars indicate a downtrend.

Traders can use the Parabolic SAR to decide when to enter or exit a trade. If the dots are below the price bars and the price is moving up, it may be a signal to buy. Conversely, if the dots are above the price bars and the price is moving down, it may be a signal to sell.

However, traders should be cautious because the Parabolic SAR can sometimes produce false signals, particularly in volatile markets. Therefore, traders should use other technical indicators and risk management strategies to minimize their losses.

The Parabolic SAR is a trend-following technical indicator that is commonly used by traders to identify potential entry and exit points in the market. The basic idea behind the Parabolic SAR strategy is to use the indicator to identify the direction of the trend and then enter a trade in that direction.

It’s important to note that the Parabolic SAR is not a standalone indicator, and traders should use it in conjunction with other technical and fundamental analysis tools to make informed trading decisions. Additionally, the Parabolic SAR strategy can be used in different timeframes and with various types of assets, such as stocks, Forex, and commodities.

• Download “ForexWOT-EMADXparabolicSAR” (Zip/RAR File).
• Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
• Copy the “ForexWOT-EMADXparabolicSAR.tpl” file (template) to your Metatrader Directory …/templates /
• Start or restart your Metatrader Client.
• Select Chart and Timeframe where you want to test your forex system.
• Right-click on your trading chart and hover on “Template”.
• Move right to select “ForexWOT-EMADXparabolicSAR” trading system and strategy.
• You will see the “EMADX Parabolic SAR System” is available on your Chart.

Remember, the goal of the filter tools is to filter out range periods. In this example, we, thus, chose a slow STOCKHASTIC setting (26,3,3). The STOCKHASTIC signals strong trending markets when the lines go above 60, or below 40.

In this chart you can see how precise the STOCHASTIC seems to signal trend markets.

• First, the STOCKHASTIC confirms a long uptrend when it increase above 60 and stays there for an extended period.
• When the price is above the SAR, we only looks for potential buy trades.
• The SAR is our trailing stop loss.

• When STOCKHASTIC confirms a long downtrend when it dips below 40 and stays there for an extended period.
• When the price is below the SAR, we only looks for potential sell trades.
• The SAR is our trailing stop loss.

Traders should be cautious because the Parabolic SAR can sometimes produce false signals, particularly in volatile markets. Therefore, traders should use other technical indicators and risk management strategies to minimize their losses.

It’s not about a 100% winrate. Instead, a trader should maximize his profitable trades, and find ways to minimize losing positions.

This will tilt the “Reward:Risk Ratio” in his favor and provide much more to his positive expectancy, than just looking at winrate.