Parabolic Sar (PSAR) Forex Exit Stategy
The Parabolic Sar indicator is a great tool in guiding you where to exit both long and short trading positions in the forex market for any currency pair and timeframe.
It is also a great way to remove emotions from trading and the guesswork involved.
How to interpret Parabolic SAR?
- When the currency pair is trading below the blue dots (see picture below), it simple means the price is going down.
- When the currency pair is trading above the blue dots, it simply means the currency price is going up.
Download the best parabolic SAR indicator for Metatrader 4 below.
How does the Parabolic SAR exit forex strategy work (Rules)
1) In an up trending currency market, place and continue trailing your stop loss UP according to the PSAR dots.
2) In an down trending currency market, place and continue trailing your stop loss DOWN according to the PSAR dots.
PSAR Trading Example
The 4 hour euro/dollar chart below shows you how to trail a stop loss in an up trending market using Parabolic Sar.
It’s easy and quite effective in strong trends.