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Parabolic SAR

Trading Term

For use in trending markets, parabolic SAR uses a trailing stop and reverse method to help determine good exit and entry points. The Parabolic SAR calculation is:

SARt+1 = SARt+ AF x (EPtradex SARt)

Where: SARt+1 — next period’s SAR SARt – current SAR AF – acceleration factor, begins at .02 and increases by .02 to a maximum of 0.20. You can reset the initial, increments and maximum acceleration factor when you create the study. EPtrade — the extreme price (HIGH for long positions and LOW for short positions).

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