Parabolic sar
Basically, parabolic SAR is used to indicate a trend of a couple in forex trading. But I never used for that purpose. From this indicator that is not correct in giving me buy or sell signals with excellent results. However, it is very useful to help us when showing the right time to exit market.
'SAR' stands for Stop and Reverse. The indicator was developed by Welles Wilder, creator of RSI and ADX. Parabolic SAR is more popular for setting out the objectives for establishing direction or trend. While others recommended to establish a trend first, and then trading parabolic SAR in the direction of the trend. If this trend is, buy when the indicator moves below the price. If the trend is down, sell when the indicator moves above the price.
ADX is used to determine when is the right time to enter the market and the parabolic SAR to determine when is the right time to exit.
If you sell the position when the parabolic SAR indicator is below market price, then it is the right time to exit the market. Conversely, if you buy a position, when the parabolic SAR indicator is above the market price, then it is the right time to exit the market.
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