#2 Forex trading strategy (Parabolic SAR + ADX)

The two indicators you will use here are found work effectively when used side-by-side. This Forex trading system is an another simple strategy.

You can be use this on any pair and any timeframe.
Indicators: ADX 50 (with +DI, -DI lines), Parabolic SAR default settings (0.02, 0.2)

Entry rules: You should sell when the "+DI" line is below the "-DI" line, and Parabolic SAR is giving a sell signal. When the "+DI" line is above the "-DI" line, the Parabolic sell signals must be ignored.

Entry rules: You shoule buy when the "+DI" line is above the "-DI" line, and Parabolic SAR is giving buy signal. When the "+DI" line is below the "-DI" line, the Parabolic buy signals must be ignored.

Exit rules: You should close the trade when "+DI" line and "-DI" lines crosses again.

Note: The higher the ADX is, the stronger the trend is. If ADX has reached 25, there is a good strong trend is in place.

Disadvantages:

ADX and Parabolic SAR are both follow-up indicators. Even though they complement each other very well, the weak factor here is ADX, because it can give out a signal, but change its mind later on. Once a signal is generated from ADX, it is advisable to wait for the current price bar to close to avoid false moves.