# Parabolic Sar with simple moving average Strategy For MT4

The Parabolic Sar with simple moving average Strategy For MT4 strategy is a trading system that is based on the standard set of indicators. Given the combination of indicators in this trading system, we can assume that this is a trend following strategy.

Therefore, while one could apply this trading system on the short term charts, we could also use this on the long term time frames as well. Therefore, the Parabolic SAR with simple moving average forex trading strategy is effectively both an intraday and swing trading system.

However, given the set up of the indicators, it makes more sense to use the Parabolic SAR with simple moving average forex trading strategy as a swing trading system.

As the title suggests, the Parabolic SAR with simple moving average forex trading strategy is made up of the Parabolic SAR indicator. Here, the Parabolic SAR is used with the standard settings. As one might know, the PSAR indicator plots the dots above and below price. It is ideal to depict the short term movements in the markets.

We then have the moving average indicator. Here, the Parabolic SAR with simple moving average forex trading strategy uses a 50 period simple moving average.

Trends are based on how price is trading, relative to the moving average. When price is below the 50 period simple moving average, we deduce that the market is in a downtrend. And similarly, when price is trading above the 50 period simple moving average, we deduce that the market is in an uptrend.

Finally, we also have a custom indicator called the ATR ratio. This indicator takes into account two ATR values. The default settings are 7 for the short term ATR and 49 for the long term ATR. There is also another setting called the trigger level which is set to one.

The ATR ratio indicator looks somewhat similar to the regular ATR. It oscillates between fixed values of 0 and 3. The trend strength is basically determined by looking at the Parabolic SAR and the ATR ratio indicator.

Thus, combining all the above indicators, we get the Parabolic SAR with simple moving average forex trading strategy. The ideal chart time frame is either a 1 hour chart time frame and above. For day trading, you could use this system on the 15 minute chart.

There are different ways that you can trade using the Parabolic SAR with simple moving average forex trading strategy. For example, and the simplest of all is using the trading system to merely use it as a trend following system.

Another way would be to use the Parabolic SAR with simple moving average forex trading strategy as a counter trend system that can allow you multiple opportunities to trade. And last but not the least, you can also use the Parabolic SAR with simple moving average forex trading strategy as a swing trading system, basically adding to your positions and trade the good part of the trend.

Let’s now take a look at how you can take long and short positions using the Parabolic SAR with simple moving average forex trading strategy.

## The Parabolic SAR with simple moving average forex trading strategy – Long positions

For long positions in the Parabolic SAR with simple moving average forex trading strategy, we should first have price trading above its 50 period moving average. This indicates that the market is in an uptrend. Following this, look for the ATR ratio indicator to be above the mid line.

Finally, wait for the Parabolic SAR to begin plotting the dots below the price. Wait for the next candlestick to open and then go long at the market. You can set your stop loss to the recent low which formed. For take profit, you can either choose to trail your stops along the PSAR levels or choose to use a fixed risk to reward set up and exit the market.

## The Parabolic SAR with simple moving average forex trading strategy – Short positions

For short positions in the Parabolic SAR with simple moving average forex trading strategy, we should first have price trading below its 50 period moving average. This indicates that the market is in an down trend. Following this, look for the ATR ratio indicator to be above the mid line.

Finally, wait for the Parabolic SAR to begin plotting the dots above the price. Wait for the next candlestick to open and then go short at the market. You can set your stop loss to the recent high which formed. For take profit, you can either choose to trail your stops along the PSAR levels or choose to use a fixed risk to reward set up and exit the market.

## Is the Parabolic SAR with simple moving average forex trading strategy good for you?

In conclusion, the Parabolic SAR with simple moving average forex trading strategy is a very simple to use forex trading strategy. The minimal amount of indicators make it easy to follow the rules. Within the defined rules, the Parabolic SAR with simple moving average forex trading strategy allows for some flexibility.

This means that traders can also find their own entry and take profit levels and slightly customize the Parabolic SAR with simple moving average forex trading strategy. Due to the simplicity of the Parabolic SAR with simple moving average forex trading strategy, it is recommended even for beginners in forex trading. This is especially good if you want to start trading with a trend following system. The few number of indicators also make it possible to load the template onto multiple charts at the same time.

However, we should mention that because of the 50 period moving average indicator that is used, the trading signals can lag quite a bit. Another point to note is that during range markets and when the moving average is flat, you can be prone to false signals. Therefore it is recommend that you use the Parabolic SAR with simple moving average forex trading strategy only on good trending markets.

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