How to trade with Parabolic SAR indicator
However, trading with Parabolic SAR is not that simple; not all Parabolic SAR reversal signals can be traded profitably.Let's turn to advice given by the developer of Parabolic SAR indicator - J. Welles Wilder. He suggests using Parabolic SAR, first of all, for trailing stops and finding the best exits.
The way Forex traders use Parabolic SAR is by simply setting a Stop loss order at the level of the most recent SAR dot appearing on the chart.
Stop is then trailed along with each new Sar dot till trend remains intact. Once Parabolic SAR indicator changes its position - SAR dots appear on the opposite side of the price - the trade is closed.
Welles Wilder doesn't recommend using Parabolic SAR as a stand alone indicator.The main reason for that is: Parabolic SAR can easily create whip-saws (false signals) during periods of market consolidation.The Parabolic SAR works best during strong trending periods, which Wilder himself estimates occur roughly 30% of the time. Thus Forex traders will need other Forex indicators to identify those strong trending periods.
For himself, Welles Wilder developed ADX indicator - another trend indicator - which tells what kind of trend is dominant and how strong the trend is. Upon knowing the trend and its health Forex traders can pick appropriate signals from Parabolic SAR and disregard the rest.
downlond indicator http://www.mediafire.com/?cmovuojwkudm121 and email forex_utara@yahoo.com