How to use Parabolic SAR to exit trades.

Now let’s review how to use parabolic SAR to exit trades.

You can also use Parabolic SAR to help you determine whether you should close your trade or not.

Check out how the Parabolic SAR worked as an exit signal in EUR/USD’s daily chart below.

When EUR/USD started sliding down in late April, it seemed like it would just keep droppin’ like a rock.

A trader who was able to short this pair has probably wondered how low it’d continue to go.

In early June, three dots formed at the bottom of the price, suggesting that the downtrend was over and that it was time to exit those shorts.

If you stubbornly decided to hold on to that trade thinking that EUR/USD would resume its drop, you would’ve probably erased all those winnings since the pair eventually climbed back near 1.3500.

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