Forex Trading Strategy – Combining Moving Average Convergence Divergence and Parabolic SAR

Written by Miroslav Marinov

Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: September 12, 2025

Here we present a simple approach suitable for trading only a limited number of currency pairs. Let us take EUR/USD as an example. The time frame we will be using is 30 minutes. The indicators we will be using are the Moving Average Convergence Divergence (MACD) with its default settings (short-term – 12; long-term – 26; MACD SMA – 9) and the Parabolic SAR, also with its default settings (0.02; 0.2).

A trader will usually seek a long entry when the Parabolic SAR gives a buy signal and the MACD main line crosses the MACD signal line from below to the upside.

A trader will usually seek a short entry when the Parabolic SAR gives a sell signal and the MACD main line crosses the MACD signal line from above to the downside.

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A trader will usually look to close their position when the MACD main line and signal line cross again, or when the market moves sideways for a while (trading range).

Below is an example of a long trade based on this trading approach.