The Parabolic SAR

Parabolic SAR

The Parabolic SAR (SAR means: Stop and Reverse), is a mathematical model that correlates the Time with the Prices. The objective of the Indicator is to find the points of a possible reversal of the Trend.

General Features of the Parabolic SAR


– The Parabolic SAR is above the Prices in a Downtrend; while is below the Prices in an Uptrend.

– The Parabolic SAR may seem similar to a Moving Average, but unlike the Moving Average, is the Indicator itself that moves above or below the Prices.

– When the curve of the SAR is reached by the Prices, the Trend is expected to reverse.

– The SAR should be use only during Uptrend or Downtrend, not during Sideways Trends.

– The SAR is also used to search for reliable level for the Stop Loss (To understand when a Trend is near its end or is already ended).

How to Interpret the Signals from the Parabolic SAR


Parabolic SAR

– It is a signal of rise: when the Prices reach the Parabolic SAR, during a Downtrend.

– It is a signal of decline: when the Prices reach the Parabolic SAR during an Uptrend.

– When the Parabolic SAR goes from below the Prices to above, it’s a signal of decline in Prices.

– When the Parabolic SAR goes from above the Prices to below, it’s a signal of rise in Prices.

Leave a Reply

© Online Trading
Internet Marketing Services LLC - Principal Office 7300 Yellowstone Road, Suite 10 Cheyenne, WY 82009 USA

On this website we use first or third-party tools that store small files (cookie) on your device. Cookies are normally used to allow the site to run properly (technical cookies), to generate navigation usage reports (statistics cookies) and to suitable advertise our services/products (profiling cookies). We can directly use technical cookies, but you have the right to choose whether or not to enable statistical and profiling cookies. Enabling these cookies, you help us to offer you a better experience.