PSAR and ADX Combo Trading Pattern

By | August 13, 2015

Thursday, August 13th, 2015 by Ashraf Moos 

Hey guys it’s Michael Freeman and today we’ve seen Ashraf’s PSAR and ADX trading pattern video go really viral on YouTube. I want you to check out the following instructions before you start practicing with this trading pattern. Ashraf has many followers in our Facebook signals community, he provides lesssons and a lot of powerful education for online traders. If you have any questions after reading the following instructions, please comment below.

Disclaimer: This Trading Pattern was first posted on Investoo.com and a few blogs but Ashraf gave it his own touch. I encourage you to watch his unique video on this topic that’s posted on my channel.

PSAR and ADX Combo Trading Pattern – Instructions. 

  • In this trading pattern we are going to trade short term reversals on trending markets.
  • Signals might come when the trend is over & price reverses, a counter trend trade.
  • They might also come after a pull back to jump in the trend.
  • We base these reverse signals on the parabolic SAR with settings of 0.02 acceleration and step of 0.1. 

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  • These signals do not work in ranging markets and this is why we also use the average directional index (ADX).
  • The ADX Indicator measures the trend strength without regard of trend direction.
  • The trigger for the ADX is going to be 25 for this pattern to work best.

 

RULES for the PSAR Indicator

  • We must be in a trending market.
  • In an ascending trend the psar must be below the price.

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In a descending trend the psar must be above the price.

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  • The first step is to wait for the psar breakout.
  • In an ascending trend we wait for a break of the psar to the downside.
  • In a descending trend we wait for a break of the psar to the upside.

RULES for the ADX Indicator

  • We must be in a trending market.
  • The ADX must be above 25.
  • To draw line use the line drawer tool as you would for drawing support and resistance and insert your line on your adx window right click on the line to edit and and set parameters to 25.

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  • If we have a psar breakout but the adx is below 25 the signal is invalid and must not
    be traded.

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SETUP FOR CALL OPTIONS

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SETUP FOR PUT OPTIONS

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Okay ladies and gentlemen, this is yet another powerful trading pattern that actually delivers! Expect up to 84% ITM rate when used correctly. Please follow all the rules and confirmations, they are there to protect you from choppy markets. Do not trade this pattern and hour before or after the news!

PSAR and ADX Combo Trading Pattern + Live Trading on YouTube

Please try this trading system first on a Free Demo Account until you manage to gain confidence in your understanding and implementation on this binary options pattern.  I hope you enjoyed today’s lesson and I welcome you to share your feedback and comments below. I will be around to answer your questions on Mike’s blog and on the Binary Options YouTube channel.

For live signals and education, you are welcome to join us at Mike’s FB signals group!

14 thoughts on “PSAR and ADX Combo Trading Pattern

  1. TONY

    thanks ashraf for the strategy, i noticed that sometimes the psar cross over, but DX+ and DX- are yet to cross but the adx is above 25 can i still take the trade. looking at some examples on backtest the trades where winners.

    Reply
  2. Joseph

    I watch your video and tried some of your tips and guess what! My ITM crossed 80% and this is the first time I crossed 80%. Thank you very much for this!

    Reply
  3. Mustafa

    I must say that ADX & PSAR combo strategy is awesome. You are doing great job Michael, with providing your views on binary option trading and also teaching us such strategy in details with the use of graphics.

    Reply
  4. Corey

    Great tutorial with images and video. I never see any other person doing such help to their readers. You both are doing great job! Keep up the good work.

    Reply
  5. Ashraf

    Hi Neil

    You can take such trades too as long as the crossover is just one candle back,you dont want to get caught in a pullback.The idea is to get the burst of momentum.

    Reply
  6. Neil

    Hi Ashraf,

    Been following your Psar/ADx system, have a question.

    Notice that quite often the red and blue lines cross before Psar has crossed over.

    Should one ignore this as a trade even though the 25 level is good.

    Reply
  7. Ashraf

    Hi,Lester, the setting for the adx is default which is a period of 14,what is important for you is to draw the horizontal line in the adx window which you will set a parameter level of 25.This is to validate that the direction you will be trading in is strong enough for price to move in your favor.I hope that answers your question.Let me know if you need further assistance 🙂

    Reply
  8. Beth

    Another clear strategy description in both the written & video form. Thanks for sharing Ashraf & for posting Michael.

    Reply
  9. Mohd Najib Mohd Amin

    Cool!!..simple but clear explanation.. i will apply to myself with this good strategy…keep it up bro!!

    Reply
  10. Donna M

    Very clear write up to go along with the video explanation. I love all the images you’ve captured to show us how things should look for a valid signal. Thank you for sharing your solid strategy.

    Reply
  11. Daniel Nzioka

    Its a good strategy; i will try it from nest week to harvest the results. thank you very much for your good work in this website and facebook page.God bless you.

    Reply

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