DEFINITION of '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.
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).