Thanks for Checking out The Parabolic SAR Trading Strategy Report that we have developed for

you to learn and apply to your trading system..

This Trading Strategy will teach you how to catch new trends on the reversal.

The Parabolic Sar trading tool is a dynamic trading tool that is used by many professional traders
of every market (Forex, Stocks, Options, Futures). It is best used when the market is trending. If
the market is choppy, the market is moving sideways, this tool does not particularly work at its
best.

This was developed by Welles Wilder when he introduced this into in his book in 1978 that was
titled, New Concepts in Technical Trading Systems.

What this tool basically does is helps traders determine when the current trend will end, or is
about to end. The way it shows you this, is by the Dots that show up above or below the price
candle. They appear above or below the current candle for a specific reason. If the dot is above
the candle it will be a SELL signal or down trend. However, if the dot is a below the candle this
can be a signal to BUY or an uptrend. When change occurs (the dot goes from below to above
the next candle) this indicates a potential reversal may be starting.

Some may think why not just trade the dots. When it reverses, just make an entry at that price.
Technically you can trade like this, and may win some, but this is very risky way to trade this.
You need other tools to validate this potential trend reversal.

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As you can see above, if you simply just trade the dots this will frequently happen.

Which is why we use this indicator and two moving averages to determine an entry point. The
moving averages will help verify that a reversal is in fact occurring.

The combination of these indicators will give you accurate trend reversal set ups.

This strategy can be used on any time frame on your chart. So day traders, swing traders and
scalpers are all welcome to use this type of strategy.

Here are the indicators you need to apply on your chart to use this trading strategy:

1. Parabolic Sar: Standard Settings

2. 40 Length Moving Average= Green color in our example
3. 20 Length Moving Average= Red color in our example

Rules for Short trades using this strategy

Rule #1- Apply indicators to chart

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You can choose different colors for the moving averages. The 20 period moving average is Red
and the 40 period moving average is Green in this example.

Rule #2- Parabolic Sar Dot must change to be above price candle

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Notice how the Parabolic Sar dots were below the price. The price stalled out for a few hours
and then the Parabolic sar dot appeared above the candle.

This is a sign that a reversal may be happening.

Rule #3- Another element that must occur is the moving averages must cross over.

In a short trade the 20 period moving average will cross and go below the 40 period moving
average.

So now the 20 period moving average is below the 40 period moving average. However,
something occurred that is notable. The parabolic sar dot then appeared below the price candle.
Since the moving averages are telling us that a down trend is most likely going to occur, we will
wait until the the parabolic sar dot appears again above price candle to validate this reversal.

Rule #4- Parabolic Sar dot must be above price candle AND moving averages cross to where 20
period MA is below 40 period MA.

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Note** One of these elements may occur before the other. The reversal dot can appear before the
MA lines cross. Or the Moving averages can cross before the reversal candle. As long as we have
both elements the entry criteria is met.

Rule #5- Enter Next Price Candle

Enter the very next price candle after the parabolic sar dot appears above candle. As you can see
on our chart where we entered the trade. Waiting one candle after makes sense because this

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proves to us that this reversal is strong. The moving averages are supporting the downtrend +
the parabolic sar dot is signifying a down trend.

Rule #6- Stop loss / Take Profit

The stop loss you will place 30-50 pips away from your entry. Always look for prior resistance or
support to determine a stop loss. In our example a stop loss was placed 40 pips from entry.

Your exit criteria is when the 20 and 40 period lines cross over again. OR when the parabolic sar
dot reverses appears at the bottom of the candle

This trade would have been a +203 pip profit using the MA cross exit approach. Not too bad.

Some will get out of the trade when the parabolic sar dot appears below the price candle. If that
was the case, in this example, you would have got +32 pips instead. Still not bad, but +203 pips
sounds a lot better.

You can use either exit strategy. This trade the downtrend was very strong so we stayed in until
the MA lines cross. Determine where you are at in a trade. If you are up +100 pips and the dot
changes to reversal consider getting out then and taking your profit.

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 Rules for Long Entry using this Strategy
Rule #1- Apply indicators to chart

Rule #2- Parabolic Sar Dot must change to be below price candle. This is a sign that a reversal
may be happening.

Rule #3- Another element that must occur is the moving averages must cross over.

In a long trade, the 40 period moving average will cross and go below the 20 period moving
average.

Rule #4- Parabolic Sar dot must be below price candle AND moving averages cross to where 20
period MA is above 40 period MA.

Note** One of these elements may occur before the other. The reversal dot can appear before the
MA lines cross. Or the Moving averages can cross before the reversal candle. As long as we have
both elements the entry criteria is met.

Rule #5- Enter Next Price Candle. Enter the very next price candle after the parabolic sar dot
appears below candle + MA lines cross and 20 period MA is above 40 period.

Rule #6- Stop loss / Take Profit

The stop loss you will place 30-50 pips away from your entry. Always look for prior resistance or
support to determine a stop loss.

Your exit criteria is when the 20 and 40 period lines cross over again.

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This would have been a nice +74 pip profit trade using this strategy.

Conclusion
As stated, this strategy can be used on any time frame. However, you should always check
different time frames and look at what the market is currently doing. No strategy can give you a
100% win ratio so always be placing your stops at the appropriate areas. I would recommend
practicing making both short and long trades with this strategy.

Below you will find a few more examples that uses the
Parabolic SAR+moving average trading strategy.

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Example #1: EURUSD 4 hour time chart- Short Entry (+331 Pip Trade)
Rule #1- Apply indicators to chart

Rule #2- Parabolic Sar Dot must change to be above price candle Another
element that must occur is the moving averages must cross over.

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Rule #3- Parabolic Sar dot must be above price candle AND moving averages
cross to where 20 period MA is below 40 period MA.

Rule #4- Enter Next Price Candle. Enter the very next price candle after the
parabolic sar dot appears above candle + MA lines cross and 20 period MA is
below 40 period.

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Rule #5- Stop loss / Take Profit

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Example #2: USDCAD 1 hour time frame (Long entry) +112 pips
Rule #1- Apply indicators to chart

Rule #2- Parabolic Sar Dot must change to be below price candle. This is a
sign that a reversal may be happening.

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Rule #3- Another element that must occur is the moving averages must
cross over. In a long trade, the 40 period moving average will cross and go
below the 20 period moving average.

Rule #4- Parabolic Sar dot must be below price candle AND moving averages
cross to where 20 period MA is above 40 period MA.
Note** One of these elements may occur before the other. The reversal dot
can appear before the MA lines cross. Or the Moving averages can cross
before the reversal candle. As long as we have both elements the entry
criteria is met.

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Rule #5- Enter Next Price Candle. Enter the very next price candle after the
parabolic sar dot appears below candle + MA lines cross and 20 period MA is
above 40 period.

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Rule #6- Stop loss / Take Profit

Exited the trade when the MA lines cross again. This was a +112 pip Winner

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