Parabolic SAR – Video Tutorial

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PARABOLIC SAR

Parabolic SAR (stop and reverse) indicator serves as stop loss level definition for Forex traders. For binary options traders it helps determine general trend direction as well as define potential trend reversal levels. Learn more about parabolic SAR and how to use it.

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Parabolic SAR Explained

Parabolic SAR is a technical analysis indicator which helps determine stop-loss levels for classic Forex and CFD traders. It is also very useful indicator for binary options traders, since it also provides the information about general trend direction. If the Parabolic SAR dots are above the price, the indicator tells us that the trend will continue moving down and the trader should ‘sell’ or ‘put’ and if the dots are below the price, the trend direction is up, and the trader should ‘buy’ or ‘call’.

How to use Parabolic SAR with binary options trading?

Binary options trading systems based only on Parabolic SAR indicator can be developed, but it is useful to combine this indicator also with other indicators, for example ADX or DMI indicator.

Take a look at the example of binary options strategy built upon these two indicators and watch the Parabolic SAR Trading Strategy video.

PARABOLIC SAR & ADX STRATEGY

A simple to understand ‘contrarian’ strategy for binary options trading is using Parabolic SAR and ADX indicators. This is a trend trading strategy for currencies, which uses 5 minute technical charts for analysis and 15-60 minutes expiry times. Watch the video tutorial and learn this simple strategy.

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Parabolic SAR Strategy Rules

Contrarian strategy is a simple trading strategy for binary options trading with currencies (forex). Strategy is useful in trending markets, especially in the periods of longer trends.

5 minute charts are used for technical analysis and trade entries in the direction of the developed trend are made after the pullbacks against the trend. Two indicators (Parabolic SAR and DX) are used to provide the trade signals. Expiry times can be from 15 minutes up to full hour, depending on the speed of market.

Strategy results depend much on market conditions, however up to 15 trades per day can be made with a single currency, achieving avg. 60-70% win rate if applied in trending market.

Strategy is quite flexible and a trader can enter the trades only on the signals provided immediately after the trend direction change, or can enter successive trades in longer trends. The first option will enable lesser number of trades with expected higher WIN/LOSS ratio whereas the second option will enable making a higher number of trades. Each following trade in the developed trend will hold more risk of reversal forming into trend direction change, resulting in potentially unsuccessful trade.

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Parabolic Sar + Fractal 60s Binary Options Indicator – Trading Pattern

How to Setup

Expiration Time

Please set the expiration time for 1 minute. If you still dont have IQ Option account you can open demo account HERE

“General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.”

Chart Setup

Please select candelstics chart, from the chart types in left down corner.

Candlestics Period

Please setup chart period with 5 seconds

Indicators

Please select Parabolic SAR from indicators list

Parabolic SAR Setup

Please setup Parabolic SAR as :

acceleration max: 0,2

Indicators

Please go to indicators and select Fractal indicator

Fractal

Please setup fractal settings:

colors: first green, second red.

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Fractal Plus Parabolic SAR

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There are some financial experts who consider that the market follows a pattern that prices can be predicted, these patterns are constantly repeated. They can be identified and correctly anticipate the pattern that the market is experimenting at any moment, and the trend it will follow each time a pattern is present. Fractal allows breaking down complex well-recognized pattern into very simple and easy to identify reversal pattern. This information gives advantages for traders to anticipate the price moment and the market trends.

What are Fractals?

Fractals in assets or commodities trading are recurring patterns that precede market reversals. Therefore, each time a fractal is identified the market movement can be correctly predicted or anticipated because it follows a previously studied pattern.

Basic Fractals Interpretation

a) Bearish turning point pattern is identified when there is a formation with a highest in the middle and the two lowest high on each side of it. This is selling sign because the price will go down for that asset or a sign to buy a call

b) Bullish turning point pattern is identified when there is a formation with the lower low in the middle and two highest low on each side of it. this is a buying sign because the price will go up for that asset, or a sign to buy a put

What Is Parabolic Stop and Reverse (Parabolic SAR)

The parabolic SAR is a momentum indicator invented by J. Welles Wilder. It is used to determine a momentum price direction and identify the time when this momentum has the highest probability to experiment a trend reverse or switch its moving direction. This ability is called the Stop and Reverse. The indicator estimates correctly the momentum asset direction as well as when it will stop following the current price direction and starts changing or reverse it for this reason this indicator signals the best market’s entry and exit point at any moment. The parabolic name is given because the dots on the price chart that make the graphical representation of this indicator draw the shape of a convex curve or a parabola.

Basic Parabolic SAR interpretation

·This indicator is quite simple to use and understand

a) Each time the dotted line drawn by the parabolic SAR is below the candlestick bar, the prices are going to reverse and increase. Therefore, this is a clear signal to buy the asset

b) Each time the dotted line drawn by the parabolic SAR is above the candlestick bar, the prices are going to reverse and decrease. Therefore, this is a powerful signal to sell the asset.

  • This indicator can be used at any time since it only anticipates if the price will be going up or down
  • Parabolic SAR indicator works best in trending markets, and with long trends, it’smore accurate and with more specificity.

The fractals strategy works better, when it is confirmed with a second indicator, Parabolic SAR is the perfect complement for fractals. When they are used together, their prediction value is increased exponentially, additionally. Their capacity to properly identify the market signs is improved and their accuracy is close to 99% of times.

Parabolic Sar + Fractal 60s Binary Options Indicator

To trade with this strategy you have to open account with IQ Option. If you still dont have IQ Option account please click HERE to open a demo account!

“General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.”

When to Open Put Option

When Parabolic SAR dots are change place from bottom of candlestic, and become upper of candle, and fractal arrow show up that means trend is changing and can go down.

When to Open CALL Option

When Parabolic SAR dots are change place from upper of candlestic, and become under of candle, and fractal arrow show down that means trend is changing and can go up.

“Your capital may be at risk. This material is not investment advice.”

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    Good choice for experienced traders!

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