We present to your attention a universal trading indicator based on Parabolic SAR. Modifications were made by the user MTH2014, with the forum Binary Options Edge, for which he special thanks. Like the original, the indicator signals potential trend reversals with points at the top and bottom of the price chart. In the modified version, the signal points are numbered with numbers 1-2-3, which helps to determine specific reversal figures on the chart.
Characteristics of the indicator
Platform: Metatrader 4
Currency pairs: Any major
Option type: Call/Put
Expiration of the option: One candle
Trading time: 24 hours a Day
Entry into the transaction is carried out at points 1, 2 and 3. The main signal is the appearance of a green or red mark with the number 1 on the chart. The signal appears when the price breaks the parabolic level. If the first deal is closed in money, we ignore the 2nd and 3rd points. If the first transaction is closed with a loss, the size of the following contracts is increased by Martingale.
We are waiting for the first signal (point 1) and enter the direction of the minimum volume reversal. Green point – Call, red – Put. Expiration time – one candle of the current timeframe (for example, M15 – 15 minutes).
If the trade is successful, wait for the next main signal (point 1).
If not, wait for point 2 to appear.
At point 2 consists of a double volume in the same direction. Expiration time is the same, one candle. If the point does not appear and the trend has changed its direction, we are waiting for the next main signal (the next point 1).
If the transaction is successful, the result will have a small profit.
If not, enter again at point 3.
At point 3, enter the volume twice as large as the previous input. The trend has changed and the point does not appear – do not enter.
If the transaction is successful, the result is a small profit (depending on the amount of payments).
If not, enter the next main signal (point 1) with the minimum volume, and then according to the plan.
Together, the points 1-2-3 represent a reversal pattern (a repeating figure on the chart). Therefore, there is a high probability of continuation of the trend after the 3rd point. At the same time, the chart itself gives hints on whether to wait for the continuation of the movement or not. Let’s see an example with the ascending patterns:
1 – an Ascending candle; 2 – a Descending “inner” candle; 3 – the Last ascending candle indicates the presence of a strong movement, which is confirmed by the subsequent growth.
1 is a Rising candle; 2 – a Rising candle; 3 – Descending candle breaks the previous low – signal weak upward momentum.
1 – Ascending candle; 2 – Descending candle; 3 – the Last ascending candle confirms the presence of directional movement (trend).
1 – an Ascending candle; 2 – a Descending candle breaks the previous minimum; 3 – an Ascending candle with a very small body and a large tail, which indicates a very weak upward momentum.
These rules apply to more advanced traders and do not apply to the system in question. You can modify the system for yourself, using more complex candlestick patterns and enter only after the third signal. For filtering, for example, you can use trend moving to exclude flat areas.