I have noticed that on the oanda platform, when using parabolic SAR, every time a reversal occurs, there is a SAR dot missing. Like if the dots are above the price, i’ll get a candlestick with no dot, then dots below it. I’ve never seen two missing dots in a row, or missing dot then a continuation of the same SAR trend. So i’ve been treating it as if it is indeed a reversal signal, even though there is no dot.
I can’t post images because i only have two posts so far, but here’s a link for you to copy paste, notice every time the SAR switches over, there is a candlestick with no SAR. Any ideas why?
img694.imageshack(dot)us/i/screenshot20110411at110.jpg/
I’m not sure how PSAR is “supposed” to work but that behavior is “normal” as far as I’ve seen with Oanda. Seems like when the previous PSAR (dot) level is breached, it will skip a dot before reversing. I’ve also seen it put a same-color dot on the other side and then change it to the new color only when price confirms the move. Bottom line for me is… when the dot is breached, price action is congested and MAY reverse. It is confirmed a couple bars later when the dots appear on the correct side of price and correct color. I use PSAR (0.03, 0.3) on the 5min chart as a bias indicator for shortterm trend. Frequently with this combination of settings price will just barely breach the level but then snap back.