Parabolic SAR
A trailing stop that accelerates toward price and flips side when price reaches it.
Formula
SAR = SARₚᵣₑᵥ + AF × (Extreme point − SARₚᵣₑᵥ) AF starts at 0.02, rises 0.02 with each new extreme, up to 0.20
How to read it
Dots below price: uptrend; above: downtrend. A flip is the signal.
How to use it
A mechanical trailing stop for trending markets.
Limitations
Whipsaws constantly in a range.
In Kereon
Charts · Superchart. Wilder's rules step for step, as TradingView's reference: the stop is kept out of the last two bars' range, and a reversal starts at the run's extreme or the reversal bar's own, whichever is further.
Also called: sar, stop and reverse, parabolic.