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General Information 1. Stochastic Oscillator 2. On Balance Volume (OBV) 3. Japanese Candlesticks 4. Relative Strength Index (RSI) 5. Bollinger 6. Standard Deviation 7. Linear Regression Channel 8. Parabolic SAR 9. Moving Average Convergence/Divergence (MACD) 10. Williams %R 11. Momentum 12. ZigZag 13. Moving Average 14. High Low Open Close (HLOC) 15.ADX 16.Fibonacci 17.Draw Tool

Parabolic SAR

Definition: J. Welles Wilder's parabolic time/price is a simple study to use. The study continuously computes "top and reverse (SAR)" price points. Whenever the market penetrates this "stop and reverse" point, you liquidate your current position and take the opposite position. If long, you liquidate the long position and establish a short position. If short, you liquidate the short position and establish a long position. The parabolic time/price study always has you in the market.

Why use The Parabolic SAR

Why use The Parabolic SAR The Parabolic SAR give investors an automatic stop that is logically correct. The stop moves very slowly at first allowing for market realignment to the new trend, then accelerates as the market trend moves. Detect trend reversals.

Analysis Tools for the Parabolic SAR

The SAR system is different to almost all technical trend following systems in that it is a function not only of price change but also of time. It is so constructed that once the trade is initiated it allows time for the market to react to the change in terms of trend and then as the trend gets underway the Stop progresses with the market, slowly at first and accelerating as the market trend does. The Stop may at intervals stand still as the trend consolidates but the Stop never backs up or reverses it is always unidirectional. After a specified time has elapsed (ten new price highs in bull markets or ten new lows in bear markets with default values) the progression of the Stop becomes a function only of price and not time and price. Seeing as the SAR is a trend following system and in a range market the whipsaws can be extremely dangerous. tre le high et le low du jour ou du jour précédent. Si cela arrive, c'est le signal d'inversion de tendance qui se déclanche.

To understand the mechanics of the system we must assume and accept that a previous trend has reversed by the triggering of an appropriate SAR point. Once this has occurred we are now in a trade. The first SAR is the extreme point reached in the previous trend, i.e. if we've just gone long the initial Stop is the extreme low of the previous down trend shortly before we were signalled to go long; if we've just gone short then the initial Stop is the extreme high of the previous up trend shortly before we were signalled to go short. The SAR is never advanced into the previous period's range or the current period's range.

Tips & Tricks   ^

Use the Parabolic SAR in conjunction with the Williams %R indicator as they seem to function hand in hand on certain trends and signals. You should also use the HLOC or Candle sticks while studying Parabolic SAR mouvements, seeing as the days high and low prices are used for the calculations.

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