** Parabolic SAR with 50 Simple Moving Average Strategies.**

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By the way let’s enjoy earnmoneyfx.com research team provided new strategy

‘’**Parabolic SAR with 50 Simple Moving Average Entry Exit Strategies’’**

Parabolic SAR with 50 Simple Moving Average Entry Exit Strategies is combined indicators

strategy where first indicator is Parabolic SAR and second indicator is 50 Simple Moving

Average.

For your kind information, Parabolic SAR and 50 Simple Moving Average both are lagging

indicator.

Lagging indicator means those indicators who provide entry and exit signal after price

movement.

In simply, you get entry and exit signal after price already increase or decrease few pips.

From lagging indicator you unable to get signal early as like as candlesticks pattern trader

or price action trader.

I am sure you have few question now. For example, If Parabolic SAR and 50 Simple Moving

Average both are lagging indicator so why I use it and why earnmoneyfx.com research

team provide it?

Is it not waste of time, money etc?

Here earnmoneyfx.com research team answer is **NO.**

Because…….

*** Parabolic SAR with 50 Simple Moving Average Entry Exit is easy to understand

*** Parabolic SAR with 50 Simple Moving Average easily identify where to Entry and where

to Exit

*** Though you are master in price action or candlesticks pattern but you will reentry

when you get Parabolic SAR with 50 Simple Moving Average entry signal.

Before enter deeply this strategy, at firs we need simple idea about Parabolic SAR and 50

Simple Moving Average.

**Simple Moving Average:**

Moving Average are various types. E.g. Simple Moving Average (SMA), Exponential Moving

Average (EMA), Smoothed Moving Average (SMMA) etc.

Simple Moving Average (SMA) is most uses of them because of its easy to calculate and

understand.

**Definition and Calculation of Simple Moving Average (SMA):**

**A simple moving average is formed by calculating the average price of a currency**

**over a specific number of periods. **

Most moving averages are based on closing prices; for example, a 5-day simple moving

average is the five-day sum of closing prices divided by five.

As its name implies, a moving average is an average that moves.

Old data is dropped as new data becomes available, causing the average to move along the

time scale.

The example below shows a 5-day moving average evolving over three days.

Daily Closing Prices: 11,12,13,14,15,16,17

First day of 5-day SMA: (11 + 12 + 13 + 14 + 15) / 5 = 13

Second day of 5-day SMA: (12 + 13 + 14 + 15 + 16) / 5 = 14

The first day of the moving average simply covers the last five days.

The second day of the moving average drops the first data point (11) and adds the new

data point (16).

The third day of the moving average continues by dropping the first data point (12) and

adding the new data point (17).

In the example above, prices gradually increase from 11 to 17 over a total of seven days.

Notice that the moving average also rises from 13 to 15 over a three-day calculation period.

Also, notice that each moving average value is just below the last price. For example, the

moving average for day one equals 13 and the last price is 15. Prices the prior four days

were lower and this causes the moving average to lag.

For your kind information, Any moving average strategy is trend trading system.

Moving Average work well when price are up trend or down trend.

In choppy or sideways market moving average strategies are unable to well.

So we always avoid using moving average strategies when markets are choppy or

sideways.

Other wise its chance to hit stop loss more and more.

Simple Moving Average is default indicator in Metatrader4 or Metatrader5.

Metatrader4 Simple Moving Average plot as below

**Open Metatrader4 > Insert > Indicator > Trend > Moving Average> Simple > OK**

You just change period is 50.

**Parabolic SAR:**

The Parabolic SAR was created by J. **Welles Wilders.**

In Parabolic SAR, Parabolic / Parabola means DOTS of charts when you add Parabolic SAR

indicator.

SAR means Stop and Reverse. So Parabolic SAR called Stop and Reverse indicators.

Parabolic SAR is a trending indicator. In strong up or down trend market Parabolic SAR

determine where to buy or where to sell in any market like forex, stock, commodities etc.

The Stop and Reverse feature indicates that you can always with market. Either long or

short position every time.

The Parabolic SAR DOTS determine your BUY and SELL signal.

By default Parabolic SAR indicator setting, The **DOTS** rise or fall with price accordingly

which called acceleration.

When Parabolic SAR DOTS spot below price that means market will be uptrend.

When Parabolic SAR DOTS spot above price that means market will be downtrend.

Parabolic SAR DOTS also uses as TRAILING STOP LOSS. When you get BUY signal by Parabolic SAR that

means you must close your previous SELL position there after you can buy.

**Calculation of Parabolic SAR:**

It is very important to understand calculation of any trading indicator. By understanding, you

will avoid nuances associated when use this indicator.

**The Calculation Of The Parabolic SAR is: **

**SARn+1= SARn + Α(EP – SARn)**

**SARn** is the current period

**SARn**+1 is the next period value

**EP** equals the extreme high or low value in the current trend

**“A”** is the acceleration factor

Metatrader4 Parabolic SAR plot as below

**Open Metatrader4** **> Insert > Indicator > Trend > Parabolic SAR > OK**

**No need to change Step and Maximum value**

Important fact of Parabolic SAR with 50 Simple Moving Average Entry Exit Strategies which

must remember as below:

1. For trend identification, We must use 50 Simple Moving Average. We will buy when price

above 50 Simple Moving Average and We will sell when price below 50 Simple

Moving Average.

2. We do not stop and reverse by Parabolic SAR if it create contradiction with 50

Simple Moving Average buy sell signal. Here 50 Simple Moving Average is most

priority.

3. We must trail our stop loss by Parabolic SAR DOTS. You can take partial profit as

your profit taking strategy.

Let’s discover how to entry and exit this strategy

**Parabolic SAR with 50 Simple Moving Average Entry Exit Strategies:**

Image 1:

**Parabolic SAR and Candlesticks same time signal**

**Image point number – 1,** Candlesticks cross 50 Simple Moving Average. Please note, here

candlesticks close below 50 Simple Moving Average. Touches 50 Simple Moving Average is

not acceptable. Close is mandatory.

**Image point number – 2,** Parabolic SAR dots flipped above of 50 Simple Moving Average

crossing candlesticks. As per this strategy rules, Its SELL signal.

**Image point number – 3,** Conservative or aggressive traders put their SELL STOP order 2

pips below of 50 Simple Moving Average crossing candlesticks.

**Image point number – 4,** Conservative or aggressive traders place STOP LOSS Parabolic

SAR dots.

**Image point number – 5,** Conservative or aggressive traders place 50% take profit level

on near swing low or 1 : 2 or 1 : 3 risk reward ratio. Rest of 50% will be open till Parabolic

SAR dots flipped.

**Image point number – 6,** Parabolic SAR dots flipped before hit of near swing low or 1 : 2

or 1 : 3 risk reward ratio. If you are conservative trader you will exit 100% . If you are

aggressive trader then you will wait until price cross 50 Simple Moving Average.

**Parabolic SAR and 50 Simple Moving Average Swing Trading Entry Exit**

Image 2:

**Image point number – 1,** Parabolic SAR dots flipped candlesticks which is above of 50

Simple Moving Average. We do not sell here as per rules.

**Image point number – 2,** Candlesticks cross of 50 Simple Moving Average. But We do not

sell here as per rules.

**Image point number – 3,** Parabolic SAR reverse dots flipped. We will get chance if

candlesticks unable to cross 50 Simple Moving Average.

**Image point number – 4,** Candlesticks failure to cross 50 Simple Moving Average also

Parabolic SAR reverse dots flipped. Its our entry candle.

**Image point number – 5,** Conservative or aggressive traders place their SELL STOP order

2 pips below of Parabolic SAR reverse dots flipped candlesticks.

**Image point number – 6,** Conservative or aggressive traders place STOP LOSS Parabolic

SAR dots.

**Image point number – 7,** Conservative or aggressive traders place 50% take profit level

on near swing low or 1 : 2 or 1 : 3 risk reward ratio. Rest of 50% will be open till Parabolic

SAR dots flipped.

**Image point number – 8,** Conservative or aggressive traders exit rest of 50% when

Parabolic SAR dots flipped.

For your information, if Parabolic SAR dots flipped before hit of near swing low or 1 : 2 or

1 : 3 risk reward ratio you will exit 100%.

**Image point number – 9,** Again swing entry exit strategy as per Image point no 1 to Image

point no 1.

This swing entry will happen again and again till candlesticks cross 50 Simple Moving

Average.

*——- Thanks for give your valuable time to read this article ——–*

*(To be continued)*