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FX Strategy PSAR + ADX

Time frame: Any.

Currency: Any.

Indicators: Parabolic SAR default settings (0.02, 0.2), ADX 50 (with +DI, -DI lines)

Entry rules:

Option 1: 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.
Option 2: 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.


 Trader Georgi Bozhidarov


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