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Sri Lanka Equity Forum » Stock Market Charts & Graphs » Chart Pattern - Parabolic SAR

Chart Pattern - Parabolic SAR

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1 Chart Pattern - Parabolic SAR on Sun Apr 24, 2011 7:30 pm

Quibit

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
[You must be registered and logged in to see this image.]

Parabolic Stop and Reverse is another technical indicator that is used to analyze trending markets. This indicator is similar to a Moving Average but the calculation is different and the SAR line may change its position depending on the movement of the price. The SAR line will move above the prices when the prices are falling and will move below the price when the prices are rising. As such the indicator will pause when the price line crosses the indicator and will move above or below the price line. Let's look at a graphical interpretation to understand this well.

[You must be registered and logged in to see this image.]

If you look at point "1" in the above graph you will note that the SAR is above the price line (which is a down trend) prior to that point and the as the prices starts an uptrend the SAR crosses the price line and moves below it. The opposite happens at point "2" where the price trend moves from upward to downward and the SAR crosses the price line to move above it. This happens each time the price line moves from downward to upward and vice versa.


BUY/SELL signals

It is considered that when the indicator or the SAR line is moving below the price line it is a bullish signal indicating that the price will continue its upward momentum. On the other hand, if the SAR is moving above the price line it is a bearish signal and the downward trend will continue.

Further, when the SAR line crosses the price line form below to above that triggers a SELL signal (as in point "2" of the graph). And as the SAR crosses the price line from above to below, a BUY signal (as in point "1" of the graph) is given as it is a time the SAR is placed at the most recent low price of the stock.

Caution

Although this method gives the investor the ability to arrive at buy or sell decisions, during a time period where there are multiple trend reversals Parabolic SAR could give false signals.

Signals of an indicator could be more useful when it is used in conjunction with other indicators and is more reliable. As such we advise you to use this indicator along with other indicators for it to be more reliable and useful.

Sri Lanka Equity Analytics
www.srilankaequity.com



Last edited by Quibit on Wed Apr 27, 2011 7:46 pm; edited 2 times in total

2 Re: Chart Pattern - Parabolic SAR on Mon Apr 25, 2011 8:05 pm

npc86

avatar
Manager - Equity Analytics
Manager - Equity Analytics
Dear Quibit,
From which software did you get these charts...?
I'm looking for such..

Thanks Smile

3 Re: Chart Pattern - Parabolic SAR on Mon Apr 25, 2011 9:33 pm

chamith

avatar
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@npc86 wrote:Dear Quibit,
From which software did you get these charts...?
I'm looking for such..

Thanks Smile

This is direct fn tws

4 Re: Chart Pattern - Parabolic SAR on Thu Jun 16, 2011 10:13 am

tbilesh


Stock Analytic
Stock Analytic
@chamith wrote:
@npc86 wrote:Dear Quibit,
From which software did you get these charts...?
I'm looking for such..

Thanks Smile

This is direct fn tws
what is that? please tell me more about place to get these charts...

5 Parabolic Sar on Thu Jun 16, 2011 7:16 pm

parabolicsar


Stock Trader
It is the most popular technical indicator used by numerous forex traders. It is trading system of forex chart that available through brokers or charting services, enabling the forex trader to compare different indicators on which to base his trades. Smile Laughing

parabolic sar

6 Re: Chart Pattern - Parabolic SAR on Tue Aug 23, 2011 12:28 pm

rijayasooriya

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Parabolic SAR is useful in strong upward or downward trends...ie:In our cse,when manipulation is going on Wink

http://daytrading.about.com/od/indicators/a/Parabolic.htm

7 Re: Chart Pattern - Parabolic SAR on Tue Aug 23, 2011 1:01 pm

rijayasooriya

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I analysed CLND and HVA using SAR method.Buy and Sell signals are fairly ok.But still no sell signal for both shares.But my gut say exit as soon as possible.Have to wait and see which is right...my gut or SAR..Wink

I have not got both shares in my PF.My screen shot method is not functioning so I can not post screen shot of those graphs.

8 Re: Chart Pattern - Parabolic SAR on Wed Aug 24, 2011 1:05 pm

rijayasooriya

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Look at the SAR indicator for LHCL for last 3 months.Entry point is ok but exit point is just above 70(not around 100).It seems there is big delay for exit point.

9 Re: Chart Pattern - Parabolic SAR on Tue Sep 27, 2011 6:12 pm

rmark

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Manager - Equity Analytics
Manager - Equity Analytics
Quibit,
Thank you for sharing this valuable information

10 Re: Chart Pattern - Parabolic SAR on Tue Sep 27, 2011 6:18 pm

sachithgh

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Equity Analytic
Equity Analytic
thanx for sharing with us................

11 Re: Chart Pattern - Parabolic SAR on Tue Oct 25, 2011 8:49 am

amilaela

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
thanks

https://www.facebook.com/profile.php?id=100001851586843

12 Re: Chart Pattern - Parabolic SAR on Tue Dec 06, 2016 9:53 pm

jehovah

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Equity Analytic
Equity Analytic
thanks lol!

13 Re: Chart Pattern - Parabolic SAR on Wed Dec 07, 2016 9:30 am

EquityChamp

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Moderator
@jehovah wrote:thanks lol!

Good. Are you planning to dig all the past educative materials Very Happy

14 Re: Chart Pattern - Parabolic SAR on Thu Dec 08, 2016 9:13 am

jehovah

avatar
Equity Analytic
Equity Analytic
@EquityChamp wrote:
@jehovah wrote:thanks lol!

Good. Are you planning to dig all the past educative materials Very Happy
yes... if i can find more.... Very Happy

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