Parabolic SAR Commodity Analysis & Parabolic SAR Trading Signals

Created by J. Welles Wilder.

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

• In an Uptrend, the stop and reversal will trail below the market commodities trading price
• In a downward trend, the stop and reversal will trail above the market commodities trading price

Commodity Analysis & How to Generate Trading Signals

This indicator provides excellent exit points.

Exit Commodities Trading Signal for Buy trades

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

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

Exit Trade Signal for Sell trades

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

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

Exit Signal for Buy and Sell trades