Strategies for Using Parabolic SAR (Reversal)

Strategies for Using Parabolic SAR (Reversal)

The "reversal" strategy is a strategy using the Parabolic SAR indicator that shows exactly when a trend reversal occurs. This indicator makes the trader predict correctly where assets will move.

The most profitable trades are opened right after the trend starts or during a trend reversal!

Trade Preparation

Open the Olymp Trade Chart then click on the indicator and select Parabolic Sar. Next will appear as shown below

Parabolic Sar is shown in the form of colored dots (usually in blue) that follow the graph.

We see dotted lines. The shape of this line looks like a satellite dish, and that is why it is called Parabolic.

When the graph continues to rise, these points are BELOW the graph, and when the graph continues to decline, the dotted line is ABOVE the graph.

As soon as the trend is finished (reversed), the last point is closed by the chart, crashing into the chart, passing through and reversing, the next dash pointing in the opposite direction.

The second part named SAR (Stop And Reverse) shows this exact process. The "reversal" strategy works only on Japanese candle charts.

Up

Wait until the first point of Parabolic appears under the green candle. Open the trade with a closing time of 5 minutes.

Down

Wait until the first point of Parabolic appears above the red candle. Open trading DOWN with a closing time of 5 minutes.

Important!

• This strategy gives a true signal only when there is a strong trend on the chart.

• The longer the points on the graph, the more stable the trend is.

• The greater the distance between the points on Parabolic SAR, the longer the trading time. It is possible to go into a price pullback (a move that is opposite to a trend that will very likely reverse again);

• The closer the points are on the graph, the more likely the trend is to reverse immediately;

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