We know that the Parabolic SAR is a simple tool to identify price change by looking at the change of color of the dot.
On top of that we use Stochastic to identify overbought and oversold level to have a better prediction on the reverse point. Yes this method is about trading the mirror reversal in market trends. Parabolic SAR is an indicator to identify where a trend might end.
This is the simplest indicator I have encountered parabolic sar for binary options far. Basically when the dots are below the candles, it is a HIGH signal.
On the other hand, when the dots are above the candles, it indicates a LOW signal.
Conclusion Parabolic SAR is a trend following indicator and is also popularly used among traders to set trailing stop losses. All of these indicators remain widely popular today. Dots that form underneath price and are rising in an upwardly sloping pattern suggest an uptrend. Dots that form above price and are falling in a downwardly sloping pattern suggest a downtrend.
Simple and straight forward! The Stochastic oscillator is another indicator that helps traders to determine where a trend might be ending.
It is a ranged oscillator, meaning it moves within the range of 0 to Here is the interesting part, in binary options and forex market, price tend to change direction when it hits the 20 and 80 level in the stochastic oscillator. When price hits the 80 level, it tends to go down and when it hits the 20 level, it tends to go up. Both indicators are for identifying ending of trends, and therefore this method is for trading reversal!
First, of course you need to set up the 2 indicators in the chart. Simply go to technical indicator and select Parabolic and Stochastic.
How Is the Parabolic SAR Used in Trading?
After that please follow the parameter settings below: Parabolic: Default 0. Click on the chart when it appears to be Repeat step 3 for the 20 level.
Now we are ready to make some money! Again, I made 3 trades this morning by testing this method.
Author lionbo Posted on.