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Pending long order is placed at the PSAR level, which is triggered after two sessions, highlighted by the rectangle. However, we notice that price starts to move a bit lower with the PSAR now signaling a downtrend. The Parabolic SAR is in a buy signal mode already. First, the ADX Indicator signals an uptrend with DI+ crossing above DI. The chart above illustrates a PSAR ADX buy signal set up. Parabolic SAR and ADX Strategy – Buy Signal The pending order is placed on the PSAR level until both the indicators (PSAR and the ADX) are in unison. To put it another, the ideal signal is where ADX alerts us to a new trend and the PSAR is lagging in signaling the same. When the short order is triggered, stops are placed at the candle’s high and is trailed to the PSAR levels accordingly until the short position is stopped out.Pending short order is placed at the PSAR levels (and moved to subsequent PSAR levels).An ideal sell signal is where PSAR is still in a ‘buy mode’ (PSAR is plotted below price).There is no take profit as the stops are trailed to the new PSAR levels that are plotted.When the long order is triggered, stops are placed at the candle’s low.Pending long order is placed at the PSAR levels (and moved on subsequent sessions).An ideal buy signal is where PSAR is still in a ‘sell mode’ (PSAR is plotted above price).Parabolic SAR and ADX Strategy – Buy/Sell Trading Rules In this trading strategy, we make use of the PSAR with the default settings of 0.02 step, 0.2 maximum while the ADX is configured to 30 periods with only DI+ and DI. It is up to the trader to decide which time frame works best for them. The Parabolic SAR and ADX trading strategy is ideal for scalping and the trading strategy works across all time frames. When applying the Parabolic SAR to the equation, it makes for a reliable trading set ups in the market where traders can exploit the short term momentum based trend set ups. For traders, this means that the ADX indicator often signals potential trading opportunities where price tends to be at the strongest part of its trend. The ADX Indicator is used as a reliable gauge to determine the strength of the trends.