Parabolic SAR Crude Analysis and Parabolic SAR Trading Signals

Developed by J. Welles Wilder.

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

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

Crude Analysis and Generating Trading Signals

This indicator provides excellent exit points.

Exit Trade Signal for Buy trades

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

If you are trading long i.e. The crude trading price is above the stop and reversal, the SAR will move up every day, regardless of the direction that crude price action is moving. Movement of the indicator depends on the number of pips that crude 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 crude trading price rises above the indicator.

If you are trading short i.e. The crude trading price is below the stop and reversal, the SAR will move down every day, regardless of the direction that crude price action is moving. Movement of the indicator depends on the number of pips that crude 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 & Sell trades