Parabolic SAR

In the world of short-term trading, experiences are defined by a trader’s ability to anticipate a certain move in the price of currencies. There are many different indicators used to predict future direction, but few have proved to be as useful and easy to interpret as the parabolic SAR. The parabolic SAR is a technical indicator that is used by many traders to determine the direction of currency’s momentum and the point in time when this momentum has a higher-than-normal probability of switching directions. Sometimes known as the “stop and reversal system”, the parabolic SAR was developed by the famous technician Welles Wilder, creator of the relative strength index, and it is shown as a series of dots placed either above or below currency’s price on a chart.

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