MACD Parabolic SAR Indicator
Platform: MT5 Type: Momentum Last update: September 24, 2024The MACD Parabolic SAR Indicator is, as the name suggests, a combination of Moving Average Convergence Divergence and Parabolic SAR. Both forex indicators are well-known and appreciated by traders around the world. Making a single forex indicator out of these two results in a highly-effective trading tool.
How to apply the MACD Parabolic SAR in trading?
The MACD Parabolic SAR displays green and pink dots above and below MACD lines. Green dots indicate bullish trend-momentum, and similarly, red dots reflect a bearish trend-momentum. Considering it is a trend-following indicator, it works best during strong market swings.
Buy Signal
Follow these steps for a long trade:
- MACD Parabolic SAR indicator dots switch from pink to green
- Price swings higher from recent low swing
- Buy trade is triggered after the first candle meeting above conditions
- Set stop loss a few pips below the last swing low of the market
- Take profit or exit whenever the MACD Parabolic SAR indicator provides opposite signal or use your own method of trade exit
Sell Signal
Follow these steps for a short trade:
- MACD Parabolic SAR indicator dots switch from green to pink
- Price swings lower from recent high swing
- Sell trade is triggered after the first candle meeting above conditions
- Set stop loss a few pips above the last swing high of the market
- Take profit or exit whenever the MACD Parabolic SAR indicator provides opposite signal or use your own method of trade exit
