Parabolic SAR Indices Technical Analysis and Parabolic SAR Indices Trading Signals

Developed by J. Welles Wilder.

The Parabolic SAR is used to set trailing stock indexes price stops. This indicator is usually referred to as the "SAR" (stop-and-reversal) and it is used to follow stock indexes price action closely.

• In an Uptrend, the stop and reversal will trail below the stock indexes trading market indices price


• In a downward indices trend, the stop and reversal will trail above the stock indexes trading market indices price

Indices Technical Analysis and Generating Indices Trading Signals

This indicator provides excellent exit points.

Exit Signal for Buy trades

Traders should close long positions when the stock indexes price falls below the indicator.

If you are trading long i.e. The stock indexes price is above the stop and reversal, the SAR will move up every day, regardless of the direction that stock indexes price action is moving. The movement of the indicator depends on the number of pips that indices prices move. When the SAR changes the direction then the stock indexes trading market indices trend also changes to down. This generates the exit signal for long trades.

Exit Signal for Sell trades

Traders should close short positions when the stock indexes price rises above the indicator.

If you are trading short i.e. The stock indexes price is below the stop and reversal, the SAR will move down every day, regardless of the direction that stock indexes price action is moving. The movement of the indicator depends on the number of pips that indices prices move. When the SAR changes the direction then the stock indexes trading market indices trend also changes to up. This generates the exit signal for short trades.

Exit Signal for Buy and Sell trades