Trade Stock Indices

Parabolic SAR Technical Analysis & Parabolic SAR Stock Signals

Created by J. Welles Wilder.

The Parabolic SAR indicator is utilized to establish trailing price stops. This indicator is commonly referred to as the "SAR" (stop-and-reversal) and is employed to closely monitor price action.

  • In an Uptrend, the stop and reversal will trail below the stock market price
  • In a downwards trend, the stop and reversal will trail above the stock market price

Parabolic SAR - Parabolic SAR Indicator Analysis on Charts

Technical Analysis & How to Generate Trading Signals

This trading signal offers fantastic exit locations.

Exit Indices Signal for Buy trades

Investors and Traders should liquidate long positions if the price falls below the reading of this indicator.

If you are trading long - The price is above the stop and reversal, the Parabolic SAR indicator will move up every day, regardless of the direction that price action is heading. The movement of technical indicator depends on number of pips that prices move. When Parabolic SAR indicator changes the direction then the market trend also changes to down. This generates the exit trading signal for the long trade positions.

Exit Stock Trade Signal for Sell trades

Close short trades if the price climbs over the indicator level.

If you're trading short - When the price is below the stop and reversal, the Parabolic SAR will keep moving down each day, no matter which way the price is going. This technical tool's movement is based on how many pips the prices change. If the Parabolic SAR changes direction, it indicates that the market trend is going up. This gives you a signal to exit your short trade.

Parabolic SAR Indicator Exit Indices Signal - Parabolic SAR Technical Indicator Analysis on Charts

Exit Signal for Buy and Sell trades

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