Forex psar
The strategy seeks to identify a new trend on the currency forex. It forex best deployed on the hourly chart. This strategy is a short term strategy which is good for intraday trading. So how is this strategy setup? This strategy involves the use of the Forex SAR indicator to pick out the trend and using the Stochastics oscillator as the confirmation for the trade.
This is because the 50 mark is the halfway point of the momentum oscillator. A Stochastics value between the oversold level and the 50 mark is deemed to be bullish while a Psar value between the overbought level and the 50 mark is deemed to be bearish. Multiple time period analysis must be used to pick the trend direction from the daily chart as well as the 4hr chart. This provides the direction for the psar on forex hourly chart.
Check the trend on the daily chart. Thereafter, step down to the 4 hour chart and see if it also confirms the trend on the daily chart.
If it does, open the hourly chart and check to see where the Stochastics lines are in relation to the 50 mark. The entry is psar based on the crossing of the lines above or below the 50 point, as well as the position of the Parabolic SAR indicator. On this chart, we can see that the Stochastics forex has performed a cross below the psar mark while the Parabolic SAR indicator was showing a bullish signal.
Usually the cross occurs a candle before the Parabolic SAR starts to show the bullish signal. The trade is therefore opened on the candle where the Parabolic SAR indicator shows a bullish signal the candle on the first or 2 nd dot is ok for entry. Place the stop loss a few pips below a recent support level such as the recent candle low. The TP point should be set 50 pips. Forex, another way of taking profits may be to wait for the Stochastics oscillator to reach overbought levels before taking profits.
Once this has been confirmed, the trade is setup as follows:. The short trade setup is shown forex this snapshot psar. Here, we can see that the trade entry forex itself up very well and the currency pair moved quite well too before it headed into oversold territory. This is psar the trader can set the trade exit. The Take Profit can either be set at a fixed value of forex pips or can be set forex the area where the Stochastics oscillator is at the oversold area as displayed on the chart.
The extremely psar term nature of this trade means that psar trader must observe this trade continuously from start to end.
The trade entry must be practiced thoroughly on a demo account because this is where most psar miss psar. Once the trade entry technique has been mastered, the placement of the exit point for the trade comes easily.
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