Price Action with Parabolic SAR

How’s everyone doing? I hope 2024 was great for you, and may 2025 bring even better opportunities! Personally, 2024 was a rough ride for me, but I’m optimistic about what the new year will bring.
By way of introduction, I’m a problem solver at my firm. Solving problems has been my life’s work, and recently I decided to challenge myself with trading. I’ve been exploring different ways to understand the markets with the hope of eventually finding success and consistency.
I’ve gone through a lot of material and tested many trading systems—it's been both educational and enjoyable. Today, I want to share a system I’ve been working on that I’m researching further.

The System: Price Action with Parabolic SAR
This system is incredibly simple, and that’s what I like about it. Instead of reading raw price action for market structure, I use the Parabolic SAR (PSAR) indicator. Here’s how it works:

1. Market Structure:
   1. When the Parabolic SAR creates higher highs and higher lows, I look to buy.
   2. When it creates lower highs and lower lows, I look to sell.

2. Entry and Exit:
   1. I enter positions based on the above structure.
   2. I hold my positions until the Parabolic SAR indicates a change in market structure.

3. Timeframes and Settings:
   1. The system works on any timeframe.
   2. The Parabolic SAR settings are left at their default values.

The beauty of this system lies in its simplicity. It’s easier (at least for me) to read the Parabolic SAR for market structure than to interpret raw price action.
I’d love to hear your thoughts on this system! Have you experimented with similar approaches, or do you have any suggestions for improving it? Let’s discuss and learn together.
Wishing you all a prosperous 2025!

It gets so much easier to see market structure with this chart settings. You can clearly see the market structure forming.

The only scenarios not be involved is when there is an expanding flag.

Expanding flag trending down or up is fine. But avoid sideways expanding flag.

And a final note, the timeframe you trade depends. I have shown 1-min examples of XAU USD because you can see all kinds of chart patterns in one day. You can see it trend in both directions. My suggestion is to choose a timeframe according to the instrument.

You can follow this routine if you are unaware of this:
All USD PAIRS 1hr time frame.
XAU USD 1hr time frame.
US30 4hr or 1hr time frame.

It also depends on time of year. Sometimes some instruments can be ranging on 1hr too then switch down to lower or higher time frames.

the price actions can easily be seen with zigzag indicator.

zig zag repaints. Actually to see price action you only need candle sticks. But i have PSAR for the aded benefits

for me, even though zigzag repaints, it gives me hh, hl, lh and ll. the zigzag indicator gives me horizontal and slanted (trend/ direction) lines and channels.

it gives me auto fibo projection to see the real price actions.
only entry signals should be non repainting/ non back printing for me, however this might not be of any help to you.

It looks like the formation of the 1-2-3 pattern.

not only 1, 2, 3 breakouts - all patterns can be seen with zigzag.
it helps you select the best entry signals