| Updated: September 12, 2025Forex trading strategy – combining exponential moving averages and Parabolic SAR
You will learn about the following concepts
- Indicators used with this strategy
- Signals to look for
- Entry point
- Stop-loss
- Profit target
For this strategy, we will examine the 1-hour chart of EUR/AUD. The indicators we will use are: a 14-period Exponential Moving Average (EMA) set to high (blue on the chart below); a 14-period EMA set to low (also blue); the Parabolic SAR with default settings (0.02; 0.2); and the Slow Stochastic Oscillator with settings 5,3,3.
As soon as a candle closes above the 14-period EMA (high), the Parabolic SAR positions itself under the candle and the Slow Stochastic is not overbought; this is a setup to go long. A trader may set a trailing stop at the 14-period EMA (low). Once the Parabolic SAR changes its position, the trader needs to exit.
As soon as a candle closes below the 14-period EMA (low), the Parabolic SAR positions itself above the candle and the Slow Stochastic is not oversold; this is a setup to go short. A trader may set a trailing stop at the 14-period EMA (high). Once the Parabolic SAR changes its position, the trader needs to exit.
- Trade Forex
- Trade Crypto
- Trade Stocks
- Regulation: NFA
- Leverage: Day Margin
- Min Deposit: $100
Below we visualise one long and one short trade based on this approach.
