Parabolic Indicator

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DEFINITION of 'Parabolic Indicator'

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)

INVESTOPEDIA EXPLAINS '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).

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RELATED FAQS
  1. What are the best technical indicators to complement the Parabolic Indicator?

    The best technical indicators to complement the parabolic stop and reverse indicator are the average directional index (ADX) ... Read Full Answer >>
  2. What is a common strategy traders implement when using the Parabolic Indicator?

    A common strategy implemented with the parabolic stop and reverse indicator is simply to follow the indicator as it moves ... Read Full Answer >>
  3. How do I use a Parabolic Indicator to create a forex trading strategy?

    The parabolic indicator generates stop points, from which existing positions should be closed and potential trend reversals ... Read Full Answer >>
  4. Why is the Parabolic Indicator important for traders and analysts?

    Another creation from famous technical innovator J. Welles Wilder Jr., the parabolic indicator signals exit and entry points ... Read Full Answer >>
  5. 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 Full Answer >>
  6. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
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