Parabolic SAR
Parabolic SAR (Stop and Reverse) is a trend-following indicator that places dots above or below price. Dots below = bullish. Dots above = bearish. When price crosses the dots, the trend flips.
Understanding the Concept
SAR is both a trend indicator and a trailing stop system. The dots accelerate as the trend continues (hence "parabolic"), getting closer to price until they're eventually hit. That's your exit signal. The beauty is simplicity—no subjective interpretation. Dots below, you're long. Dots above, you're short. When they flip, you reverse. The downside is whipsaws during choppy markets. SAR works best in strongly trending conditions. Combine it with a trend filter (like ADX) to avoid getting chopped up in ranges.
Real-World Example
Ethereum is in an uptrend with SAR dots below each candle. As price rises, the dots move closer. Eventually, a red candle closes below the dots—SAR flips. Time to exit longs or consider shorts.
How Strykr Helps
Strykr's AI monitors Parabolic SAR signals across 5,000+ assets in real-time. Get instant alerts when significant patterns emerge, with context about market conditions and confluence factors.
Try Strykr Free