Parabolic SAR Trading Strategy – How to use Parabolic SAR Strategy Intraday Indicator Strategies

Does Parabolic sar indicator trading strategy even work? Are online trading guru’s telling you false information? In this video i will back-test 100 times, a very famous trading strategy called the Parabolic sar indicator strategy. Yes you heard it right. testing 100 times takes time, and will most likely prove, if you should risk your hard earned money, using this strategy! This video will be very similar to the CCI and MACD video i made a while ago. If you want to know if those strategies work after testing 100 times? Check those videos out.

On Trading View, this is what the Parabolic sar Indicator looks like. Once you add it on your chart, you will see some dots above and below the candles. If you have never heard about this Parabolic sar indicator, check out my previous video where i explain this indicator in detail.

In my Fractal video, I talked about how Fractal works on a simple U pattern and why it gives a lot of false signals. Just like the Fractal Indicator, Parabolic sar, uses a method called SAR, or “Stop and Reverse”, to find the entry signals. So most of the entry signals given by the Parabolic sar indicator are unreliable.

But In my last video, I showed you a way to filter these false signals by using other indicators like, Alligator and 200 Period Moving Average. Alligator and moving average are both used to find the direction of the trend. Since Parabolic sar gives a lot of false signals on its own, we can use the Moving Average and the Alligator to avoid taking false entries.

The strategy I am going to show, is a combination of the Parabolic sar, the alligator, and the 200 period moving average. If you have never heard about the alligator indicator, check out my previous videos on this channel.

To filter false signals given by the parabolic sar, I have modified the strategy something like this.
When the Parabolic sar gives a buy entry signal, the entry candle has to be above the 200 period moving average. And it has to be over the jaw line. The teeth line should be below the lips line, and above the jaw line. Furthermore, The entry candle, should not touch the jaw line. Also, the parabolic dot should be above the 200 period moving average. In this long setup, you can set your stop loss, just below the parabolic dot.
It sounds confusing, I know. But it works. So lets look at a short setup.

When the parabolic sar gives a sell entry signal, the entry candle has to be below the 200 period moving average. And it has to be below the jaw line. The teeth line should be above the Lips line, and below the jaw line. Furthermore, the entry candle, should not touch the jaw line. Also, the parabolic sar Dot should be below the 200 period moving average. In this short setup, you can set your stop loss, just above the parabolic dot.

I have tested many different strategies 100 times on this channel, and in most of those videos, I have used a fixed risk to reward ratio. I did that to make sure I test those strategies in the latest and same market conditions.

In this video, I am going to test this Parabolic sar indicator 100 times, with a fixed risk to reward ratio, because we want to see, how well it performs as an entry signal generator, and because it will also help us compare the parabolic sar, with other indicators we have tested before.

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