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Parabolic SAR Strategy | Wiki | Indicator | Formula | Settings | Uses | Calculation | Success rate & more

(Last Updated On: August 11, 2021)
Hello…How are you?

Well, today I am going to talk about one of the most popular trading indicators ie. Parabolic SAR.

So, keep reading ahead Parabolic SAR Strategy | Wiki | Indicator | Formula | Settings | Uses | Calculation | Success rate & more

Parabolic SAR Wiki

 

 

The Parabolic SAR is one of the most popular trading indicators. devised by the great J.Wilder.

The Parabolic SAR or Parabolic Stop and reverse is a really popular indicator mainly used to find the short term trade.

This indicator helps you to find the short term trade by using series of dots placed either above or below the chart.

Small dots are placed below the chart when the market is dominated by buyers or when the market is bullish.

Similarly, small dots are placed above the chart when the market is dominated by Sellers or when the market is bearish.

The Parabolic SAR Formulla is:

SAR n +1 = SARn + EP – SARn

Here, SARn and SARn+1 represent the current period and period SAR values.

Here, EP (Extreme point) is the record kept during each trend.

How to use Parabolic SAR effectively?

Parabolic SAR is really easy to understand.

Here, to illustrate Parabolic SAR. I am going to use Olymp Trade.

If you don’t have an Olymp Trade account click here.

You can also sign up via the form given below.

 

Once you click the link above you will land on the Olymp Trade homepage.

Click on register.

Now, enter your email, password and click sign up.

Once you signed up you will land on the Olymp Trade dashboard.

Click the candlestick button.

Now, click on the Indicator button.

 

Lastly, select Parabolic SAR from the menu.

 

That’s it!!! The basic setup is over.

Parabolic SAR Strategy

No doubt Parabolic SAR is really popular and profitable. However, I will suggest you to confirm your trade with Support and Resistance for better results.

The golden rule of Parabolic SAR says:

If the market is in a bullish trend the  Parabolic SAR dots will stay below the chart plus If the line is near the support level then we should go for BUY Trade.

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Similarly, If the market is in a bearish trend the  Parabolic SAR dots will stay above the chart plus If the line is near the resistance level then we should go for SELL Trade.

 

How To Trade with Parabolic SAR?

Trading with Parabolic SAR is damn very easy.

Just remember the Parabolic SAR golden rule.

If the market is in a bullish trend the  Parabolic SAR dots will stay below the chart plus If the line is near the support level then we should go for BUY Trade.

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Similarly, If the market is in a bearish trend the  Parabolic SAR dots will stay above the chart plus If the line is near the resistance level then we should go for SELL Trade.

Now, let’s check some examples.

 

Given above is a 1-hour chart. as you can see, the Parabolic SAR dots are above the chart plus the candle has broken the support level, so, here we can take SELL Trade for 1 hour.

 

 

Similarly, given above is 30 mins chart, and we can clearly see the parabolic SAR is above the candle and the moment the candle touches the resistance level it falls back down.

So, here we can take SELL trade for 30 mins.

Which time frame is best for Parabolic SAR?

To be honest, Parabolic SAR works the same in all time frames.

However, If you want to take a low risk then you should always use a 1-hour chart or more.

1- min Chart

 

Given above is 1- minute chart. as we can see. The Parabolic SAR is showing too many dots which will make it very difficult to trade.

Similarly, Given above is 1- hour chart here, in 1- hour chart the market will fluctuate less than 1 – min or 10 – min chart.

Therefore, we should use a longer time frame for Parabolic SAR to make a good profit.

 

Final Point:

That’s it!!! this is the end of this story.

I hope you have found this article helpful.

So, Trading with Parabolic SAR is that easy.

Just, remember the golden and use Support and Resistance to confirm your trade.

This article was all about Parabolic SAR Strategy, Parabolic SAR Wiki, Parabolic SAR Indicator, Parabolic SAR  Formula, Parabolic SAR Settings, Parabolic SAR Uses, Parabolic SAR Calculation, Parabolic SAR Success rate & more

 

 

 

 

 

 

 

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