100 EMA AND PARABOLIC STOP AND REVERSAL EASY FOREX STRATEGY FOR BEGINNERS

This strategy is one of the easy forex trading strategies which beginners may effectively use in their forex trade transactions. It only uses two basic indicators for analyzing the market situations and making the ultimate buying/selling decision: 100 EMA and the parabolic SAR (stop and reversal) indicator.

For buying using this strategy, price has to be located above the line representing 100 EMA. Next, a parabolic SAR dot has to emerge below a candlestick. The trader now has to place a pending buy stop order 2 pips above the high point of the candlestick mentioned above. Stop loss should be placed 2 pips below the closest swing low. The previous swing high in this case is used as take profit.

For selling under this strategy, the conditions are contrary. Namely, price has to be located under 100 EMA, and a parabolic SAR dot has to emerge above a candlestick. The trader than places a pending sell stop order 2 pips below the low point of the candlestick mentioned above. Stop loss should be placed 2 pips above the closest swing high. The previous swing low in this case is used as take profit.

This may be an easy and profitable forex strategy particularly in strong trending markets, where quite evident signals emerges for buying and selling. The use of previous swing extreme points as take profit values is another advantage of this strategy which makes it even more understandable and easier to use. Still, the market may generate false signals as well, and time lags may play an important role. So, the trader should always remain attentive for avoiding unforeseen losses.