Channel MA and Parabolic SAR Forex Trend Following Strategy

August 16, 2016

964

Channel Moving Average and Parabolic SAR Trading System

This is another trend following strategy that uses moving average and parabolic SAR. Use this system on a 15, 30 and 60 minutes and use this to all currency pairs. The setup of the indicators are indicated below:

Set Simple Moving Average 32 and apply HIGH and LOW. Form a channel on the chart moving averages.

Long Entry Position:

Price must close above the average SMA (32) High.
Price must be above the moving average 100/200 SMA.
Closing price of the bar should be higher than the opening price of the bar.
Price must “penetrate” Parabolic SAR from the bottom up.

Short Entry position:

Price must close below the average SMA (32) Low.
Price is above the moving average 100/200 SMA.
Closing price of the bar should be lower than the opening price of the bar.
Price must “penetrate” Parabolic SAR from the top down.

Set Stop loss immediately after placing order under the closest fractal below the average SMA 32 low if you are going long.

If you have short position, set stop loss above the nearest of a fractal (local maximum) above the average SMA (1932) High.

Take profit at 10 pips for 15 minute timeframe, 13 pips in 30 minute timeframe, 18 pips in a 60 minute timeframe.
Move after the appearance of a new point indicator parabolic SAR.