Entry Trigger Parabolic SAR (PSAR): This indicator helps identify potential trend reversals. A sell signal might occur when the PSAR is above the price, indicating a downtrend. When developing your strategy, look for PSAR dots to switch positions relative to the price chart.
Confluence Indicators:
MACD (Moving Average Convergence Divergence): Look for bearish crossovers (when the MACD line crosses below the signal line) to confirm your entry signal from PSAR. Stochastic Oscillator: A reading above 80 can indicate overbought conditions. Confirmation here would include the %K line crossing below the %D line. ZLEMA (Zero-Lag Exponential Moving Average): Use this to identify the trend's direction. A downward slope or the price being below the ZLEMA could confirm a bearish bias. Accumulation Distribution Line (ADL): This technical indicator can confirm the trend's strength. If the ADL is declining while price moves upwards, it can confirm that the upward move may not be sustainable. Exit Trigger Parabolic SAR (PSAR): Use the PSAR flip (when it moves below the price) as an exit signal, indicating a potential trend reversal to the upside.
Confirmation Indicators:
RSI (Relative Strength Index): Look for overbought conditions, typically above 70, to confirm an exit signal. Stochastic Oscillator: A reading above 80, combined with a crossover (where %K crosses below %D), can signal a good opportunity to exit a trade. VWAP (Volume Weighted Average Price): If the price crosses below the VWAP, it may indicate a shift in sentiment from bullish to bearish. PPS (Pivots Points Standard): Look for price action around pivot levels. If the price is failing to hold above a key pivot level, it could be a reason to exit.