Indicators used for strategy

There are 3 main indicators: MACD, PSAR, and ATR, all of which use default settings.

PSAR is used in this strategy for the purpose of identifying stop loss and confirming trading signals.

Trading principles

For buy orders
  • When the MACD Histogram crosses above zero and the red signal line goes inside the histogram, we can now open a buy order.
  • At the same time, the Parabolic SAR indicator is on the upside, which is below the chart at our entry point. If the SAR dot is above the price, there is no condition for us to trade.
  • Always be on the lookout for critical support and resistance levels on higher timeframes and make sure that there aren't too many hurdles in the way the price moves. For example, if you trade on H4, check important support and resistance levels on D1, W1 ...
  • The stop loss is located below the PSAR. It is important that this stop loss changes according to the price chart. When the trade is profitable, the trader can reschedule the stop loss according to PSAR.
The ideal signal is that the MACD Histogram should be above zero and the signal line crossover occurs at the same time as the reversal of the SAR dots moving from above to below the price chart.

For sell orders
  • When the MACD Histogram crosses below zero and the red signal line goes inside the histogram, we can now open a sell order.
  • At the same time, the Parabolic SAR indicator is on a downtrend, which is above the chart at your entry point to sell. If the SAR dot is below the price, there is no condition for us to trade.
  • Always be on the lookout for critical support and resistance levels on higher timeframes and make sure that there aren't too many hurdles in the way the price moves. For example, if you trade on H4, check important support and resistance levels on D1, W1 ...
  • The stop loss is placed above the PSAR. It is important that this stop loss changes according to the price chart. When the trade is profitable, the trader can reschedule the stop loss according to PSAR.
The ideal signal is that the MACD Histogram should be below zero and the signal line crossover occurs at the same time as the reversal of the SAR dots moving from below to above the price chart. As shown below is the sell setup:
Also, when you see the MACD is rising high and then showing signs of going sideways, you can stop moving your stop loss and exit there. As shown below:

Objectives deny

Receive part or all of the profit if the price reaches critical support and resistance.


If there is a strong price reaction bouncing back from support or resistance, you should now close the entire position. Alternatively, if there is no previous support or resistance zone, you can use ATR or ATR multiples to take profits based on the average trading range over a given timeframe. ATR, 2ATR, and 3ATR are good profit targets.

Or you can take profit partly based on ATR. For example, take 1/3 of profit at ATR, then 2/3 at 2ATR, and the last third at 3ATR. But keep in mind, you need to ensure your strategy has a 1: 2 ratio or higher.

To see how we can combine support and resistance, we'll use the miniature 4-hour chart to illustrate this situation. The support level is an important technical area on the daily and weekly timeframes.