Parabolic SAR indicator

Parabolic SAR

Parabolic SAR   known as one of the indicators of the price in technical analysis. Use   tools   It aims to recognize the reversal of the tendency of price trends, as the name suggests   SAR:   Stop and Reverse. This tool was first introduced by J. Welles Wilder Jr., in his book   "New Concepts in Technical Trading Systems. In addition to having a role as an indicator of reversal,   Parabolic SAR   has been generally used as a tool to determine the level of   stop loss   or   exit points.

Name   Parabolic SAR   was taken from the display indicator is formed by a series of point-tick resembles a parabola. There are two parameters in the method of calculation   Parabolic SAR. The first parameter is called   Step, deciding the location of the SAR point to price. The higher location   Step   are, the more sensitive the performance of the indicator. So that the intensity fluctuations   SAR   (Upward or downward price) is high. This results in many failures that complicate the prediction and anticipation.      

The second parameter is   Maximum Step, a number that set point adjustment   SAR   against further price movement. The higher the number is visible, the closer the point   SAR to the next price movement. Vice versa,   Maximum Step   Low will keep the point   SAR   or   Trailing Stop   of the price movement. Wilder, the inventor, recommend value   Step   and   Maximum   left on value   default   0.02 and 0.2.

Use

As with other indicators in general,   I c parabolic SAR   works well when prices are in a condition   uptrend   or   downtrend. While the condition   sideway,   Parabolic SAR   often produce a signal that fails, or is generally known by the term   whipsaw.

In order to overcome these problems, Wilder suggested the use of   Parabolic SAR indicator combined with other trends. The indicator serves as a guide that gives confirmation whether the ongoing trend has been inadequate, both in terms of the direction and quality. Users should really identify trends very well, for example by using indicators   ADX.   Only then will take a position using   Parabolic SAR   in the direction of the new trend is identified.

Here is usability and how the indicator   Parabolic SAR:

• Recognize price trend

You do this by observing the movement of dots   SAR   or   dot   which in

below or above the price movement.

- T ren rise occurs when the price moves above   SAR

-   Down trend occurs when prices move below   SAR

• Posts   and   Exit

You do this by observing the price movement of the dots   SAR   on

the top and bottom in the indicator.

-   Buy when the price passed the point   SAR   top

-   Sell ​​when the price passed the point   SAR   bottom

-   Signal   Exit   or   Stop   appears when the input signal occurs opposite positions

Calling Parabolic SAR way into your Graph

To call   Parabolic SAR   into your graph, click the menu   insert. Select indicator>   trend   > Parabolic SAR.

You can also do the same thing by clicking on the icon on the indicator   Toolbar, then select   d trends and   parabolic SAR.