---
title: 'Best Parabolic SAR Strategy for Day Trading Crypto, Forex & Stocks'
source: 'https://youtube.com/watch?v=rr8gRzM4Ngk'
video_id: 'rr8gRzM4Ngk'
date: 2026-08-05
duration_sec: 654
---

# Best Parabolic SAR Strategy for Day Trading Crypto, Forex & Stocks

> Source: [Best Parabolic SAR Strategy for Day Trading Crypto, Forex & Stocks](https://youtube.com/watch?v=rr8gRzM4Ngk)

## Summary

This video presents a comprehensive guide to using the Parabolic SAR indicator for day trading across crypto, forex, and stocks. The presenter explains the indicator's basics, demonstrates a common but flawed strategy, and then introduces enhanced strategies that combine the Parabolic SAR with a 200-period EMA and divergence analysis to improve win rates and manage risk.

### Key Points

- **Applying Parabolic SAR** [00:31] — Apply the Parabolic SAR indicator from the indicator section, using default settings. Dots appear above or below candles.
- **Reading the Indicator** [00:45] — Dots below the candle indicate an uptrend; dots above indicate a downtrend. The distance between dot and candle reflects trend strength.
- **Common Beginner Strategy** [01:52] — Beginners often take long/short positions based solely on dot position. This is flawed because the indicator gives signals in ranging markets and ignores the overall trend.
- **Combining with 200 EMA** [03:42] — To filter signals, identify the long-term trend using the 200-period EMA. Only take trades when the Parabolic SAR aligns with the EMA direction.
- **Using Parabolic SAR as Exit Strategy** [05:07] — Instead of waiting for the dot to switch (which gives late exits), set a stop loss at the Parabolic SAR dot and a profit target at 1.5 times the stop loss distance.
- **Parabolic SAR Divergence** [07:12] — Divergence occurs when price and indicator move in opposite directions. A bullish divergence forms when price makes lower lows but the SAR makes higher lows; bearish divergence is the opposite.
- **Divergence Entry Strategy** [08:38] — After a bullish divergence, wait for the SAR to flip below the price to confirm bullish momentum, then enter long. Place stop loss at the SAR and target 1.5x the stop loss.

### Conclusion

The Parabolic SAR is a versatile trend-following indicator, but it must be used with trend confirmation (like the 200 EMA) and proper risk management to avoid false signals in ranging markets. Combining it with divergence analysis can further improve entry timing and profitability.

## Transcript

leading cryptocurrency copy trading platform earn up to 630 worth of rewards description below in this video i'll be showing you a simple high win rate parabolic sar indicator strategy so without further
ado let's get on with the video the parabolic sar or also known as the parabolic stop and reverse is a simple to use trend indicator that does a very good job of providing us with both entry and exit signals
so first let's apply it onto our chart so you go to the indicator section type in parabolic and click the one that says parabolics are now for the settings i prefer to leave it as it is and just use the default settings
look like immediately you'll see multiple dots that is positioned to be either above or below the candle and the way we analyze the market using this indicator is actually very simple if the dots are positioned below the
candle it indicates that the current market is on an uptrend candle it indicates that the current market is on a downtrend the distance between the dot and the candle also reflects how strong the
trend is the further it is from the candle the stronger the trend let me show you an example so here we can see that the dot is below the candle indicating that the current market is on an uptrend then as the
uptrend starts gaining momentum notice that the distance between the dot and the candle also increases and after that as the momentum starts getting weaker the distance between the dot and the candle also becomes narrower until
finally the dot switches to above the candle indicating that the direction of downside now i'm going to show you the different parabolic sar so first a common strategy that is often
used by beginner traders is they simply take long or short entries based on the position of the dots alone for example when the dot switches to below the candle they take long positions and when the dot switches to above the
candle they take short positions now despite this being a famous strategy there are actually a couple of problems if you use the indicator this way firstly the parabolic sar is a trend indicator meaning it only works on
trending markets remember markets aren't always trending it can also move within range and because the parabolics are is constantly showing signals non-stop it means that it'll also show signals even when the market
example here we can see that the parabolics are switches to below the candle indicating that the market is on an uptrend and according to the strategy we take a long position here
we can see that the trend has ended and the market started moving sideways however notice that the parabolic star is still displaying entry signals even a result all the signals that the indicator displays on this ranging
market ends up being a loss so in short the parabolic star only works on trending markets if the market is on a range like this it will display the second problem with using the powerball xr this way is that it doesn't
consideration let me explain so let's say you enter a short position here because the parabolics are switches to above the candle overall chart you can see that the overall market is
actually on an uptrend so if you took a short position here based on signals you are actually trading against the overall trend which is not a good idea and that is why the solution to this is you need to combine the parabolic star
the long term an example of that would be the 200 period exponential moving average so here's how the full strategy would work the first step is you want to identify the long-term trend and you can do that
by looking at the position of the price relative to the 200 ema for example if the price is above the 200 ema it indicates that the long term trend is up and if the price is below the 200 ema it indicates that the long term trend is
now once you've identified the long-term trend the next step is you want to wait for the parabolic star to show the same signal as the long-term trend for example here we can see that the price is below the 200 ema indicating that the
long-term trend is down this means that we're waiting for the parabolic star to also show bearish momentum by waiting for it to go above the candle once this happens you take a short position now it's the same for long positions as
here we can see that the price is above the 200 ema indicating that the long next you want to wait for the parabolic star to also show bullish momentum by waiting for it to go below the candle once this happens you take a long
position and so by simply adding the 200 ema into the strategy you can now safely trade the parabolic sar while making sure that trend now moving on
besides using the parable xr as an entry strategy you can also use it as an exit strategy as well and one of the most common ways that traders use it as an exit strategy is by simply waiting for the parabolic star to switch positions
let me show you an example so here we can see that the price is above the 200 ema while the parabolic star is below the candle and according entry now for your exit strategy you can let
until the parabolic star switches positions so once it switches you can however by doing this notice that the price had already made a significant downwards movement before the parabolic star displayed an exit signal meaning
you already lost a portion of your profits because of the late exit signal a better way so first let's rewind back this trade now instead of waiting for the parabolic star to switch positions before exiting
your trade you can instead set a stop loss at the parabolic star itself so if you enter a long position here you can set your stop loss below here at the and for profit target you can set it at 1.5 times your stop loss
trades run until the price hits one of the target and as you can see using this exit exit signal compared to if you waited for the dots
to switch positions now there are times where the parabolic star is placed too far from the candle like in this example here we can see that the parabolic star is positioned way below the candle meaning if you set
your stop loss all the way down here you'll be risking a huge amount if the trade ends up being a loss and so if you think that a stop loss is placed way too you can just adjust it depending on your personal risk tolerance
now moving on the next high win rate strategy that you can use with the parabolics are is by using it to find divergences so first what are parabolic star divergence so a parabolic star divergence is when the
direction of the indicator let me show you an example so usually if the price is heading upwards the parabolic star will follow that direction and also head upwards similarly
parabolic star will follow that direction and also head downwards there are times where they move in the opposite direction instead like in this example you can see that the price goes down but the parabolic star is going up
this is what's called a divergence and usually when a divergence has been formed it may indicate that the trend will form a continuation therefore giving you a possible trade opportunity so here's how the strategy works
the first step is you want to find a divergence and to make it easier to find a line chart next you want to find instances where opposite direction of the price like in this example here we can see that the
parabolic star is heading downwards but the price is heading upwards instead and so this will be your divergence now the question is how do we know if this is a bullish divergence or a bearish divergence so to answer that question
of the price as the divergence is forming so in this particular example we upwards meaning this is a bullish divergence entry signal so for your entry signal after the
bullish divergence has been formed you want to further confirm the bullish momentum by waiting for the parabolic sr to switch below the price so once this you enter a long position now for your stop loss you can place it
at the parabolic sar and set your profit target at 1.5 times your stop loss here we can see that the parabolic star is heading upwards but the price is
heading downwards instead meaning we just found another divergence now since the price is moving downwards as the divergence is forming it divergence next for your entry signal you want to
confirm the bearish momentum by waiting for the parabolic star to go above the candle so once this happens you take a short position now for your stop loss you can place it at the parabolic xr and set your profit
target at 1.5 times your stop loss and as you can see
market have begun trending lately which means it is the perfect time to trade it guys out there that wants to start trading cryptocurrency you can check out today's sponsor bid get bit get is a regulated cryptocurrency copy trading
platform designed specifically for derivatives trading and if you sign up using the link below you can get rewards worth up to 630 dollars by completing the tasks available on their website and for new traders out there that are just
getting started bitget has a feature called copy trading that lets you automatically copy the trades from top performing traders around the world with over 1.5 million users bitget is ranked number 8 worldwide on coin market cap it
also has a built in trading view chart which means you can analyze trades and execute them within the same platform bit gets is also available on mobile devices meaning you can trade anytime and anywhere you can also join the bid
frequent giveaways and competitions for you to win and again if you use the link below and complete all the tasks you can get rewards worth up to 630 dollars this video and so that's all for today thank you so
much for watching and i'll see you in the next video