Combining the technical analysis indicators Parabolic SAR and Simple Moving Average is very popular among experienced traders.
Because of the nature of these trend indicators, traders usually use them together in order to confirm signals. It is very important to know how to monitor the micro-trends in turbo options trading in order to understand when to expect rate reversal movements.
How to choose indicator parameters?
Each trader can set the parameters on his own, but as an example, we will look at a Simple Moving Average line with period of 55 and a Parabolic SAR with acceleration of 0.04.
The Moving Average will look like a curve on the price chart while the Parabolic SAR will look like a set of dots either above or below the current rate.
Those traders who stick to this trading pattern invest money in two cases (these signals are highlighted in orange on the chart):
Expected upward tendency – when the current rate is below the Moving Average line and the Parabolic starts to point to an upward trend.
Expected downward tendency – when the current rate is above the Moving Average line and the Parabolic starts to point to downward trend.
If one of conditions is not satisfied, traders usually wait for another signal.
This trading pattern is very simple to understand and apply an IQ Option trading platform. Every trader can choose a set of parameters on his own and also try the parameters mentioned above.
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