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Parabolic Stop and Reverse (SAR)
Parabolic stop and reverse (SAR) is indicator in technical analysis which is used to identify points in time when momentum has higher than normal probability of switching direction.
Parabolic stop and reverse calculation:
For AccFactor is usually used value of 0.02 and for AccLimit value of 0.2.
Parabolic stop and reverse (SAR)
Interpretation
Indicator is below price line when prices are rising and above when prices are falling. Parabolic stop and reverse can be used for generating exit signals: close long position when price falls below SAR and liquidate short position when price rises above SAR.
Example
Open chart for google with parabolic stor and reverse indicator.