The Parabolic SAR (Stop And Reversal) indicator helps us to get an idea of when the trend may end. Parabolic Sar indicates the change of trend with the help of dot or point in the chart.
Most indicators give you a signal to start a new trend. Just as it is important to identify new trends, it is also important to identify the end of trends. If the trade is not closed at the right time, there is not much benefit in opening the trade at the right time.
How to trade with Parabolic SAR?
Parabolic SAR is a very simple and simple indicator. When the dot falls below the candle, it signals a buy signal. And when the dot comes on the candle, it means the sell signal.
This indicator will work much better in the trending market. But when the market is on the sideway trend, you will not get good results.
How to close a trade with Parabolic Sar?
With the help of Parabolic Sar you can know when to close your trade. See the EURUSD chart below. The Parabolic Sar exit signal has acted as a daily chart.
If you see 3 dots, you can close your previous trade and open a new trade towards the new trend.
Long time vs short time trade:
To trade short time you need to do a lot more analysis and make a trade with instant decision. So that there is more possibility of wrong trade. So there is more possibility of loss than profit. On the other hand, if you do a trade by clearing a lot of accounts and hold for a long time, you will see that you can make a lot of profit and the number of wrong trends will be much less, so even if there is a loss, there will be less loss. So I think long trade is much better. But it depends on your strategy. Depending on what your strategy signals. Because if the strategy says to take short time trade then you have to do so. And if you want to take a long time trade, you have to do it.