Parabolic SAR is a simple indicator and is available with many trading softwares. The system is explained in three to four phases. They are :-
1. Entry Rules
2. Exit Rules
3. Re-entry Rules
4. Money Management and Instruments to be traded.
Until, one gets clarify on all the four without any ambiguity donot jump to implement it.
Firstly,
Rules for entry.
TIMEFRAME : 1 HOUR CHARTS (It is very tough to trade, below 1 hour charts under this system)
1. When Parabolic SAR is formed below price, look for long entries. and viceversa for shorts.
2. Once first condition is met, for longs, look for a bar which has lower high than previous bar. Let it be called trigger bar. Entry will be on break of high of this bar.
3. If the trade is not triggered on the very next bar, and this new bar makes a new low high, then treat this bar as trigger bar and cancel earlier orders.
4. Chase the price on new lower high bars, until the trade is triggered.
5. Once in trade, put the initial Stop Loss at the Parabolic SAR formed below the entry bar.
Some charts with examples for clarity.
1. Entry Rules
2. Exit Rules
3. Re-entry Rules
4. Money Management and Instruments to be traded.
Until, one gets clarify on all the four without any ambiguity donot jump to implement it.
Firstly,
Rules for entry.
TIMEFRAME : 1 HOUR CHARTS (It is very tough to trade, below 1 hour charts under this system)
1. When Parabolic SAR is formed below price, look for long entries. and viceversa for shorts.
2. Once first condition is met, for longs, look for a bar which has lower high than previous bar. Let it be called trigger bar. Entry will be on break of high of this bar.
3. If the trade is not triggered on the very next bar, and this new bar makes a new low high, then treat this bar as trigger bar and cancel earlier orders.
4. Chase the price on new lower high bars, until the trade is triggered.
5. Once in trade, put the initial Stop Loss at the Parabolic SAR formed below the entry bar.
Some charts with examples for clarity.