Parabolic SAR indicator

Forex – Parabolic SAR indicator

The Parabolic SAR is an indicator that follows the trend and determines the reversal point in the price channel. SAR literally means “Stop And Reverse.”

Visually, it takes the form of a series of dots that are either above or below the price chart.

How to setting parabolic SAR indicator on the olymp trade android apps?

a) First, switch to the Japanese candlesticks chart.

b) You can set the period and the color of the indicator dots. For the period, we recommend leaving the standard value – 0.02.

c) If you increase it, the indicator will give more signals, but their accuracy will decrease. If you decrease it, the signals will be more accurate, but there will be fewer of them.

d) The longer the indicator’s period, the greater the expiration time must be.

e) The farther the Parabolic SAR dots from the chart, the more stable the trend. The closer the dots, the more likely the trend is to reverse.

f) The Parabolic SAR gives accurate signals only if the market trend is strong.

Trade on the direction of the trend?

1. You can use the Parabolic SAR to trade on the direction of price movement or when the trend reverses.

2. Observe the chart. If the dots do not change direction, this means that there is no trend reversal signal and you can open a trade on the trend.

3. The trend is ascending if the Parabolic SAR dots are beneath the chart and the parabola ( candlesticks chart ) is being built bottom up.

The trend is descending if the dots are above the chart and the parabola ( candlesticks chart ) is being built top down.

How to trade on a trend reversal?

If the first Parabolic SAR dot appears beneath a green candlestick, this is probably a signal of an upward price reversal as below image following.

If the first Parabolic SAR dot appears above a red candlestick, this is probably a signal of a downward price reversal as below.

Note that the appearance of a second confirming dot after the indicator has changed direction is a trend reversal signal.

The information above is puts from olymptrade.com

What is the Ichimoku Cloud?

The Ichimoku Cloud is an integrated trend indicator.

It allows to identify both the direction of a price and the strength of a trend.

The indicator consists of 5 lines similar in operation, but with different types of moving averages.

With this structure, it generates several types of signals at once to help find market entry points with high accuracy.

The first type of Ichimoku Cloud signals

The Ichimoku Cloud generates 3 types of signals. The first and basic is the intersection of the Tenkan Sen and Kijun Sen lines.

When the Tenkan Sen crosses the Kijun Sen upwards from below, it likely indicates a rise.
The shape that these lines form is called a “golden cross”.

If the Tenkan Sen crosses the Kijun Sen downwards from above, it likely indicates a fall.
The shape formed when the lines intersect this way is called a “dead cross”.

We recommend using standard periods and an offset.

As for style settings, the Tenkan Sen and Kijun Sen lines can be highlighted with brighter colors or their thickness can be increased.

In the majority of cases, a trade is opened when these lines intersect.

The more noticeable they are, the easier it is to read their signals.

The images and the points were put from olymptrade.com.

EMA signals

How do I read EMA signals?

We recommend leaving the standard settings. If you want, you can change the line thickness and color.

The basic principle of trading with the EMA is to trade on the direction of a trend.

The optimum time to open a trade is when the asset price reverses. This is indicated by a change in the direction of the EMA line and its intersection with the chart candlestick.

A reasonable sign of a price reversal downwards is when the indicator crosses the candlestick chart and the EMA line turns downwards.

When the EMA line reverses and heads upwards, crossing the candlestick chart, it likely signals a rise.

Momentum

Aroon or momentum is an oscillator. It helps determine the direction of the price and find trend reversal points.

Momentum takes the form of a line that moves and periodically crosses the 100 level.

What is SMA

The Simple Moving Average or SMA is often called the ordinary or simple moving average because it is calculated with the simplest formula in the class.

In this case, the average asset price for the selected period is used.

The SMA helps identify a trend and clearly shows when it will end.

How do I read SMA signals?

The SMA is used both in combination with other indicators and on its own.
If the SMA rise above its average, then the indicator’s ascending movement will continue.

When the chart crosses the indicator upwards from below, it likely signals a rise.

If the indicator falls below its average, this implies a descending trend.

When the chart crosses the SMA downwards from above, it likely signals a fall.

Secrets of SMA indicator

The simple moving average (SMA) is one of the most popular and simplest indicators.

The SMA averages price data and helps reveal trends. Visually, it is a line.

It reliably tracks the chart and, smoothing out random price fluctuations, it shows the direction in which the asset’s value is moving.

Trading on a trend reversal

The strategy is based on a combination of the MACD oscillator, the exponential moving average (EMA), and the Parabolic SAR.

Together, the signals that they generate help you efficiently analyze the current trend and see its reversal just in time.

Trading using RSI on the reversal of a trend

This is a counter trend strategy. It’s main principle, therefore, involves trading on a trend reversal.

As its name implies, the strategy is based on the RSI oscillator.

It generates 3 key signals – overbought, oversold, and divergence.

These are the ones that help find trend reversal points.

Candlestick patterns trading strategy

Japanese Standard is a trend strategy based on identifying candlestick models.

The signal to open a trade is the appearance of a candlestick in a different color that covers previous candlesticks.

How do I read candlestick signals?

Trading will require only the candlestick chart with a time frame of 5 or 15 minutes.

Switch to the Japanese Candlesticks chart. The price chart is now a series of alternating red and green candlesticks of different sizes.

Quotes take the form of columns at equal time intervals. If an asset price has risen over the selected period, the candlestick is colored green; if it has fallen, red.

If several candlesticks of the same color form one after another, you have a trend.

What candlestick models are saying?

What candlestick models are saying
By watching both how the candlesticks’ color changes and their size, you will get a signal to open trades.

In this strategy, you need to learn to identify two candlestick models.

The first is when 1 candlestick appears and its body covers the previous candlestick(s) of the opposite color.

For example, the body of a red candlestick covers the bodies of green ones. This indicates the possible start of a downtrend.

If a green candlestick is covering the length of red ones, upward price movement is most likely to follow.

The second model is when not 1, but 2 candlesticks are covering the body of a candlestick of the other color.

For example, when 2 small red candlesticks have covered 1 green one. This indicates that the downtrend will likely continue.

Or when 2 candlesticks cover the previous red one, this indicates the probable continuation of an uptrend.

What are the features of a tick chart?

The tick chart is one of the ways to show fluctuations in the value of the asset (quotes).

It shows every price change or a tick.

Please note: a tick is any movement of the asset, in any direction and for any number of points.

For example, the quotation has increased by one point — it’s a tick. Then the quote has suddenly dropped 5 points down — it is also a tick.

A tick is a mandatory price change. If the value of the asset does not change, the tick may not appear.