The two indicators we are going
to talk about here are found to be very well working when used side by side.
This Forex trading system is an another simple discovery; and hundreds of such
discoveries can be made when traders are there to learn and experiment.
Any currency pair and time frame can be used.
Indicators: Parabolic SAR default settings (0.02, 0.2), ADX
50 (with +DI, -DI lines) Entry rules: SELL When the +DI line is below the -DI line, and Parabolic
SAR gives sell signal. When the +DI line is above the -DI line, all Parabolic
sell signals must be ignored. Entry rules: BUY when the +DI line is above the -DI line, and Parabolic
SAR gives buy signal. When the +DI line is below the -DI line, all Parabolic
buy signals must be ignored. Exit rules: when +DI line and -DI lines have
crossed again. Advantages: allows filtering
entries and predicting good exits. Disadvantages: Both Parabolic SAR
and ADX are follow-up indicators. Although they complement each other very
effectively, the “weakest” in chain is ADX, because during trading it can give
one signal, but later change to the opposite. Once given a signal from ADX,
waiting for the current price bar to close to avoid such misleading is advised.