Having looked at parabolic sar, and ADX – what about the two forex indicators together? Some people rate it highly as a sufficient system to produce trustworthy signals in itself – I’m not convinced – for the reason that these are both lagging indicators, and just don’t seem to give the more robust signals that, say RSI on its own, can give.

Parabolic SAR default settings (0.02, 0.2)
ADX 50 (with +DI, -DI lines)

Entry rules:
Sell: +DI line is below the -DI line, and Parabolic SAR produces sell signal.
Buy: +DI line is above the -DI line, and Parabolic SAR produces buy signal.

Exit rule: when +DI and -DI lines have re-crossed.

Here’s an example that doesn’t help much:-

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On a candlestick chart, Doji form when the opening and closing prices are virtually equal. They may be open or filled, ie slightly up or down, but the body of the candlestick will be very small to non-existent.
Their upper and/or lower shadows may be pronounced – that is, there may have been significant movement during the session, but the important factor is that when the dealing’s done everything has gone back to where it started.

Doji indicate indecision in the market. Prices move above and below the opening level during the session, but close at or very near this level. So there’s an equilibrium in the final result, neither bulls nor bears could take over the market and create a trend.
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