Those who are new to the trading industry might not understand how the Forex market works. But if you look at the experienced trader in Singapore, it won’t take much time to understand the true nature of the investment business. Unless you learn to trade the market with managed risk, you should never execute any trade. Being a currency trader, always remember, the conservative trading technique is the best way to find great trades. Some of the new traders often rely on the indicators reading to find the very best trades. They always think this is the ultimate way to make a consistent profit.

Indicators are nothing but helping tools. However, if you can master the use of the Parabolic SAR indicator, you can easily make a decent profit from this market.

What is the Parabolic SAR indicator?

A parabolic SAR indicator is the trend reversal indicator. Instead of a numerical reading, you will see small dots in the price chart. If you spot three consecutive dots above the candlestick, you need to consider it as a bearish reversal signal. Similarly, if you spot three consecutive dots below the candlestick consider it as a bullish reversal signal. Based on this simple principle you can easily find high-quality trades in the Forex market.

Selection of the time frame

Choosing the right time frame is very crucial when it comes to the use of the parabolic SAR indicator. You might think lower time frame trading will give you more profit-taking opportunity. But if you do the math, it won’t take much time to understand the associated risk factors in the trading profession. Try to use the demo trading account at the initial stage so that you can learn new things about this market. Forget about the low-quality trade setups and focus on long term goals. Take all the time you need and create a simple trading technique in the demo environment.

The new traders often use too many indicators to filter out the best trades. Instead of relying on more than one indicators reading, you need to use the parabolic SAR. If the price of a certain asset hit the major support level in the daily chart, look at the parabolic SAR reading. With a bullish parabolic SAR reading, you can easily execute a long order and make a decent profit from this market.

Fine-tuning your trading strategy

Creating a perfect trading strategy using the parabolic SAR indicator is a very challenging task. However, if you learn from your past trading mistakes, it won’t take much time to develop your trading skills. Fine-tune trading strategy regularly so that you can keep pace with the changes in the market. Never try to trade the market with faulty trading strategy since it will dramatically increase the risk factors.

Managing the risk factors

Learning the proper art of money management is a very challenging task. Having access to the high leverage trading account, many retail traders often execute a trade with heavy risk. They simply forget the key concept of trading. This is not the way to trade the market. Regardless of your account type and investment size, you should never break the 2% rule of money management. By following this rule you can easily keep pace with the dynamic nature of the market. This will help you to make money even after losing a few trades. Always use the reading of the parabolic SAR indicator since it will help you to find great trades.

Conclusion

The use of parabolic SAR indicator is very simple. Install the indicator in the daily time frame and trade the key support and resistance level. Use the different formations of the Japanese candlestick pattern since it will significantly boost your profit factors. Use your intellect to fine-tune your trading strategy. Learn to take small steps and you will become successful.