What is Parabolic SAR? How to Use Parabolic SAR? – Investallign

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What is Parabolic SAR? How to Use Parabolic SAR?
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What is Parabolic SAR?

• An Introduction to the Parabolic SAR
• Parabolic SAR is Developed by Welles Wilder, its
  Price base and time base trading method. SAR is
  stands for Stop Reverse trading system. SAR
  trails price as the trend extends time the
  indicator stops and reverses when the price trend
  reverses and breaks above or below the indicator.
  This indicator mainly used by Trader for short
  term trading or intraday trading. Its very easy
  to learn and use.
• This system created this way that you are always
  in trade and with the trend. So who love to code
  his strategy is very much happy with this type of
  indicator. Who believe always in market for make
  money this indicator for them?

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Parabolic SAR indicator
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Parabolic SAR Indicator

• This system of Parabolic SAR indicator works in
  any chart type but for best use you can apply on
  candle stick chart type. On chart its looks like
  dots places above or below of price action or
  chart type. If dots below the chart type or price
  its indicated upward trends and if dot above
  price or chart type then its indicator downward
  trend. Many people love to see green dots when
  price is going up and red dots when price is
  going down. You can code that also in
  this Parabolic SAR indicator.

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Parabolic SAR Best Time Frame

• Here, very interesting topic is SL as its always
  in trend indicator means your SL should be
  dynamic. Its trailing base SL indicator. As once
  ur SL hit its also indicated reversal signal too.
  As successful traders say Trend is best friend of
  Trader.  Parabolic SAR works best in trending
  market. In range bound market parabolic SAR gives
  you false signal but you can be avoid with ADX
  indicator. To learn more about ADX click here.
  Coder may code his strategy with combine
  PARABOLIC SAR with ADX (average directional
  index).

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Parabolic SAR Formula

• PreviousSARTheSARvalueforthepreviousperiod.
• ExtremePoint (EP) Thehighesthighofthecurrentuptre
  nd
• priceorthelowestlowofthecurrentdowntrend price.
• AccelerationFactor(AF)Determinesthesensitivityoft
  heSAR.
• AFstartsat.02andincreases upby.02everytimetheEPris
  esinaRisingSARorEPfallsinaFallingSAR.

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Parabolic SAR Formula

• ThecalculationsforRisingParabolicSARandFallingPara
  bolicSARaredifferentsotheywillbeseparated.
• RisingParabolicSAR
• PreviousSARPreviousAF (PreviousEP-PreviousSAR)
  CurrentSAR
• FallingParabolicSAR
• PreviousSAR-PreviousAF (PreviousSAR-PreviousEP)
  CurrentSAR

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Parabolic SAR Formula

• Start
• The starting value for the Acceleration Factor
  (.02 is the Default).
• Increment
• The increment in which the Acceleration Factor
  will move (.02 is Default).
• Max Value
• The maximum value of the Acceleration Factor (.20
  is the Default)

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How to use Parabolic SAR effectively?

• 1. Zerodha Kite
• Open Zerodha Kite Lending Page
• Enter Symbol and Click
• Click Launch Chart Icon
• Go to Studies tab , Search Parabolic SAR
• Go with Default settings or change as per your
  working

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How to use Parabolic SAR effectively?

• 2. Streak By Zerodha
• Open Streak website , Login with your kite id and
  password
• Go to Create Tab, Add script and select time
  frame
• Select Strategy for Buy or Sell and Add Quantity
• For Buy  Buy signal to identify a bullish
  trend, PSAR crosses below Low
• For Sell  Sell signal to identify a bearish
  trend, PSAR crosses above High
• Backtests and Run Algo

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How to use Parabolic SAR effectively?

• 3. Parabolic SAR with Amibroker
• Open Amibroker Software
• Go to Code Builder section
• Copy and Paste this code under it and save
• Use Parabolic SAR strategy in any trading script
  or indices.
• Also Read
• What is Supertrend Indicator? How to Use It

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How to use Parabolic SAR effectively?

• Pros
• Parabolic SAR works best with Trending Market and
  script or indices
• Always with Market Trend with this indicator
• SAR designed for Trader to follow market Trend
  and Trade
• Great Indicator for Trader who wants to Code
  their strategy.
• Best result with ADx Indicator and
• Best Strategy with Money management tool
• Cons
• Not work with Rangebound market or low volume
  securities.
• Rangeboundmarket give you more than 50 false
  trade.

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