Parabolic SAR Indices Technical Analysis and Parabolic SAR Stock Indices Trade Signals

Developed by J. Welles Wilder.

The Parabolic SAR is used to set trailing stock indices price stops. This stock indices indicator is usually referred to as the "SAR" (stop-and-reversal) and it is used to follow stock indices price action closely.

• In an Uptrend, the stop and reversal will trail below the stock indices trading market indices price
• In a downwards indices trend, the stop and reversal will trail above the stock indices trading market indices price

Indices Technical Analysis and How to Generate Trading Signals

This stock indices technical indicator provides excellent exit points.

Exit Indices Trading Signal for Buy trades

Traders should close long positions when the stock indices price falls below the indicator.

If you are trading long i.e. The stock indices price is above the stop and reversal, the SAR will move up every day, regardless of the direction that stock indices price action is moving. The movement of the indicator depends on the number of pips that indices prices move. When the SAR changes the direction then the stock indices trading market indices trend also changes to down. This generates the exit signal for long trades.

Exit Stock Indices Trading Signal for Sell trades

Traders should close short positions when the stock indices price rises above the indicator.

If you are trading short i.e. The stock indices price is below the stop and reversal, the SAR will move down every day, regardless of the direction that stock indices price action is moving. The movement of the indicator depends on the number of pips that indices prices move. When the SAR changes the direction then the stock indices trading market indices trend also changes to up. This generates the exit signal for short trades.

Exit Signal for Buy and Sell trades