Parabolic Indicator

What is the 'Parabolic Indicator'

The parabolic indicator is a technical analysis strategy that uses a trailing stop and reverse method called "SAR," or stop-and-reversal, to determine good exit and entry points.

Parabolic Indicator



Also known as Parabolic Stop And Reverse (PSAR)

BREAKING DOWN 'Parabolic Indicator'

This method was developed by J. Wells Wilder. Basically, if the stock is trading below the parabolic SAR (PSAR) you should sell. If the stock price is above the SAR then you should buy (or stay long).

RELATED TERMS
  1. Stock Appreciation Right - SAR

    A right, usually granted to an employee, to receive a bonus equal ...
  2. Special Administrative Region - ...

    Unique geographical areas with a high degree of autonomy set ...
  3. Trailing Stop

    A stop order that can be set at a defined percentage away from ...
  4. Suspicious Activity Report - SAR

    One of the tools provided under the Bank Secrecy Act (BSA) as ...
  5. SAR (Saudi Riyal)

    The currency abbreviation the Saudi riyal (SAR), the currency ...
  6. Chart Formation

    A graphical depiction of a stock's price movements over time. ...
Related Articles
  1. Technical Indicators

    Introduction To The Parabolic SAR

    Take a closer look at this indicator, which during a trending period, is a very useful and accurate tool.
  2. Active Trading Fundamentals

    Trailing-Stop Techniques

    The important decision to exit a position must be based on more than emotion if you want to be a disciplined trader.
  3. Options & Futures

    Trailing-Stop/Stop-Loss Combo Leads To Winning Trades

    Combine trailing stops with stop-loss orders to reduce risk and protect portfolio value.
  4. Options & Futures

    A Logical Method Of Stop Placement

    If holding on to losing trades is human nature, this tool will help protect you from yourself.
  5. Investing

    Profit From Market Misunderstandings

    By learning to identify these key trends, investors can make exceptional risk-adjusted returns.
  6. Options & Futures

    Protect Yourself From Market Loss

    There are several simple strategies you can use to protect yourself from downside risk.
  7. Trading Strategies

    Three Types Of Profit Protection Stops

    Three types of profit protection stops lock in profits at different stages in the progression of a successful trade.
  8. Trading Strategies

    Trailing-Stop/Stop-Loss Combo For Winning Trades

    Traders use stop-loss orders by setting the maximum they’re willing to lose. A trailing stop is similar.
  9. Options & Futures

    Manage Risk With Trailing Stops And Protective Put Options

    Using the right strategy can lower the risk of failure and protect your profits.
  10. Options & Futures

    Increase Your Profits With Soft Or Mental Stops

    A soft stop provides a trader with added flexibility, allowing him to react to ongoing changes in the market.
RELATED FAQS
  1. How do I use a Parabolic Indicator to create a forex trading strategy?

    Learn more about how the parabolic indicator, also known as the parabolic SAR, can be used by forex traders to create trailing ... Read Answer >>
  2. Why is the Parabolic Indicator important for traders and analysts?

    Discover the rationale behind the parabolic indicator, or parabolic SAR, and why J. Welles Wilder Jr. created it to protect ... Read Answer >>
  3. What is a common strategy traders implement when using the Parabolic Indicator?

    Learn a simple trading strategy designed for use with the parabolic SAR indicator, and understand the purpose for which the ... Read Answer >>
  4. How is the Parabolic SAR used in trading?

    The parabolic SAR is a popular indicator that is mainly used by traders to determine the future short-term momentum of a ... Read Answer >>
  5. What are the best technical indicators to complement the Parabolic Indicator?

    Learn about two of the best technical indicators recommended for traders to use to refine a trading strategy based on the ... Read Answer >>
  6. What legal privileges do residents of special administrative regions (SAR) have that ...

    Citizens of SARs enjoy the autonomy of a capitalist and free society that is outside the influence of the socialist regime ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center