Parabolic SAR

[spncr2]

This is a neat little tool that seems to give you a good idea of what is next to come. Short-term indicator that is. Who else uses this?

Here is a link to help http://www.incrediblecharts.com/tech...abolic_sar.htm

[Stocktrading101]

Does investopedia have this in their dictionary? I don't have time to check out the link Spence, but mind telling me the basics behind the concept?

Thanks in advance,

Blain

[spncr2]

Sure thing. Parabolic SAR stands for stop and reverse. So basically the parabolic indicator is in some chart options to show good entry and exit points. It's pretty simple, so if the price of a stock is trading below the Parabolic SAR, you should sell. And if the stock price is aboce the Parabolic SAR , then you should buy (or stay long).


That's a little description, but IMO it makes it alot clearer if you can see it on a chart. So, if you want to see what it looks like, click this link to see a chart
http://www.incrediblecharts.com/tech...abolic_sar.htm


All the best,

[Stocktrading101]

BuMp, thanks for the explanation Spence. That website looks a little shady though if you ask me! Do you know the history behind this type of trading strategy? There isn't a chance that some random Joe Schmo came up with this is there...

[WallStGolfer31]

I've heard of it before, they have it on the scans at st.com as well


http://stockcharts.com/def/servlet/SC.scan

[lehayes]

Parabolic SAR's have been around for a very long time. They are fairly accurate in nature.

I would caution anyone who only uses one indicator to determine a buy or sell though. If there was one indicator that was 100% accurate all the time, we would not need so many other indicators to perform our trades. I know people who use the SAR's and they do fairly well, but they have missed every now and then.