Parabolic SAR Stock Analysis & Parabolic SAR Trading Signals

Created by J. Welles Wilder.

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

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

Stock Trading Analysis & Generating Trading Signals

This stock technical indicator provides excellent exit points.

Exit Stock Trading Signal for Buy trades

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

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

Exit Stocks Trading Signal for Sell trades

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

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

Exit Signal for Buy & Sell trades