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The Parabolic SAR, in short PSAR, is a very useful indicator during trending periods. Below you can download a free expert advisor for MetaTrader 4 that uses the PSAR indicator to apply trailing stop to your orders.
In case you are new to the concept of trailing stop: trailing stop is the practice of moving the stop-loss level closer to the current price when the price moves in your favor.
Trailing the stop-loss allows traders to limit their losses and safeguard their profits. It is a very popular practice.
As you may have read in books and forums, one of the first rules in Forex is Cut your losses short and let your profits run.
We won't get too much into details here, but PSAR is an indicator that follows the trend of the price. It has two parameters to adjust the speed of reaction: step and max step.
The blue dots on the image below are from PSAR set up with step at 0.02 and max step at 0.2.
In MetaTrader 4 MQL4 language, the function to retrieve the value of the Parabolic SAR is iSAR()
. You can find more details about the function in the PSAR official documentation.
The expert advisor PSAR Trailing Stop moves the stop-loss of the selected orders by assigning them the value of the PSAR at the previous candle. It is a very simple rule but it can limit losses.
Risk management is one of the most important aspect in trading. Having a stop-loss will protect you from margin calls and big losses.
In many cases, it is useful to have a trailing stop, which is a "moving stop". A trailing stop is a stop-loss where the value is updated when the price moves in the favor of the trade.
There are many types of trailing stop — it can be a fixed step change or it can follow some indicator.
In the case of MT4 PSAR Trailing Stop expert advisor, the stop-loss follows the Parabolic SAR values.
There are several advantages of using MT4 PSAR Trailing Stop EA:
This expert advisor has the following parameters that can be use to configure it:
The expert advisor is configured with the following rules:
Remember that we want to move the stop-loss level only in the trade's direction and to never move it back. This ensures decreasing potential loss and increasing potential profit.
In this example, you can see how the stop-loss was moved according to the PSAR (yellow dots).
Trailing stop is a very popular practice in trading. With the MT4 PSAR Trailing Stop, you can have your orders' stop-loss follow the Parabolic SAR indicator.
You can download the expert advisor using the link below and install it by following the presented instructions.
➥ Download MQLTA MT4 PSAR Trailing Stop
The installation is very easy to perform; the same is the use. Once you run the expert advisor, you can set all the necessary input parameters.
Make sure you enable Live Trading in the Common tab when attaching the EA and also in the platform's menu Tools→Options→Expert Advisors. Otherwise, it won't be able to modify orders.
To install the EA, please follow the instructions below:
Or you can read a more detailed instruction on how to perform the installation.
Using a trailing stop that follows PSAR can be ideal in a situation where there is a clear trend. This type of trailing stop will allow you to follow the trend to protect your trades from unexpected spikes and reversals.
You can open a trading account with any of the MT4 Forex brokers to freely use the presented here expert advisor for MetaTrader 4.