Parabolic SAR Indicator Forex Swing Trading Strategy For MT4
The Parabolic SAR Indicator Forex Swing Trading Strategy For MT4 is a trading system which uses the reversals of the Parabolic SAR indicator to generate signals for medium term trades. Swing trading is great because it does not demand a lot of screen time like in the instance when you are scalping.
Furthermore, it can be very rewarding when a trade is properly executed because the returns can be high in terms of pip-collection. I like the way this strategy is setup because using the parabolic SAR for shorter time period trading opportunities tends not to be so satisfactory.
This is because when you use it on the shorter time frames the lagging factor of the Parabolic SAR indicator greatly affects the timing of your entry on a reversal trade if this is the only indicator facilitating your signals. Therefore, resulting in you entering the trade late with an unfavorable risk-to-reward ratio.
So to overcome this you can use the four time frame just like this strategy does because the swing trades offer a better reversal trade setup. When the parabolic SAR dots are below the price action then it means you are in an uptrend and when the dots are above the line then it means you are in a downtrend.
For a suitable buy entry the price action must be trading above the dots of the Parabolic SAR indicator. Once that has been confirmed you may then activate a stop order above the candlesticks where the initial bullish Parabolic SAR dot is formed. Your stop loss should be placed anywhere from five to ten pips below the low of the candlestick specified above.
The exit point is very simple - you simply exit the trade as soon as the Parabolic SAR indicator shows a sell signal which is when the dots flips to the top side of the price action. The lagging factor is still present in the swing setups but it is not as extreme as compared to the lower time frames. Furthermore, you should avoid trading this strategy when financial asset is not in an active trend.
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