Parabolic Regression Stop & Reverse Indicator
Platform: MT4 Type: Channel Last update: July 30, 2024The Parabolic Regression Stop & Reverse Indicator for MT4 is a pretty complex forex indicator as it calculates the dynamic regression channel and trendline channel. Therefore, it may be considered as a standalone mini-trading system. It provides all the necessary data for complete trading, including entry points and exits points. A trader should have some experience to utilize that tool properly, however beginners forex traders can it a try too.
How does it work? How to apply in trading?
The Parabolic Regression Stop & Reverse Indicator consists of several elements. The core are two channels: curvy continuous Regression Channel and discontinuous Trendline Channel. Regression Channel is colored yellow when the slope is upwards and therefore the trend is considered bullish. Similarly, it is colored green when the slope is downwards and the trend is considered bearish. There are also Stop&Reverse dots that work as dynamic support and resistance.
Buy Signal
Follow these steps for a long trade:
- The slope of both Regression Channel and Trendline Channel is upwards
- Price touches lower band of both channels
- Price rejects these levels and forms bullish pattern
- Buy trade is triggered after the above conditions are met
- Set stop loss a few pips below the last low swing of the market
- Take profit or exit trade whenever the price hits a opposite band of one of the channels
Sell Signal
Follow these steps for a short trade:
- The slope of both Regression Channel and Trendline Channel is downwards
- Price touches upper band of both channels
- Price rejects these levels and forms bearish pattern
- Sell trade is triggered after the above conditions are met
- Set stop loss a few pips above the last high swing of the market
- Take profit or exit trade whenever the price hits a opposite band of one of the channels
