PSAR Moving Average trend following system is composed of 3 moving averages and PSAR (Parabolic Sar).
The system is designed to provide forex traders entry signals in the main direction of the bullish or bearish trend.
It can be applied to all currency pairs.
Used Indicators: 200 Simple Moving Average, 50 Exponential Moving Average, 7 Exponential Moving Average, Parabolic SAR with 0.02 Step
Time Frame (s): 5 Min chart and above
Currency Pairs: All
Preferred Market Sessions: Short term trading: London, US session – Long term trading: All
Open long trade when the 7EMA crosses back above the 50 EMA and the 200 SMA + PSAR dots appear underneath the currency price.
Preferred stop for buy trade: Below most recent support area. Trail stop loss up 1 pip below the rising PSAR dots (dynamic trailing stop loss).
Preferred target for buy trade: Stop x 2 or better (for example risk: 30 pips, target: 60 pips)
Open short trade when the 7EMA crosses back below the 50 EMA and the 200 SMA + PSAR dots appear above the currency price.
Preferred stop for sell trade: Above most recent resistance area. Trail stop loss down 1 pip above the falling PSAR dots.
Preferred target for sell trade: Stop x 2 or better (for example risk: 15 pips, target: 30 pips)