The Parabolic SAR

The Parabolic SAR stands for parabolic stop and reverse and is a widely-known tool used by traders, mainly in the forex market, to determine the end of a trend of a given security. The indicator can easily be applied to any trading strategy, allowing a trader to determine where stop orders should be placed.

The parabolic SAR attempts to give dealers an edge by pressing the direction an asset is moving, as well as furnishing entry and exit points. In this composition, we’ll look at the basics of this index and show you how you can incorporate it into your trading strategy. We will also look at some of the downsides of the index.

KEY TAKEAWAYS
1. The parabolic SAR index, developed byJ. Welles WilderJr., is used by dealers to determine trend direction and implicit reversals in price.
2. The specialized index uses a running stop and rear system called” SAR,” or stop and reverse, to identify suitable exit and entry points.
3. The parabolic SAR index appears on a map as a series of blotches, either above or below an asset’s price, depending on the direction the price is moving.
4. A fleck is placed below the price when it’s trending overhead, and above the price when it’s trending over.