Parabolic SAR Indices Technical Analysis & Parabolic SAR Stock Indices Signals

Developed by J. Welles Wilder.

The Parabolic SAR is used to set trailing stock index price stops. This indices technical indicator is usually referred to as the 'SAR' (stop-and-reversal) and it is used to follow stock index price action closely.

• In an Uptrend, the stop and reversal will trail below the stock indices market index price
• In a downwards stock indices trend, the stop and reversal will trail above the stock indices market index price

Indices Technical Analysis & How to Generate Signals

This indices technical indicator provides excellent exit points.

Exit Indices Trading Signal for Buy trades

Traders should close long trades when price falls below the technical indicator.

If you are trading long i.e. The stock index price is above the stop and reversal, the SAR will move up every day, regardless of the direction that stock index price action is moving. The movement of the indicator depends on the number of pips that stock index prices move. When the SAR changes the direction then the stock indices market stock indices trend also changes to down. This generates the exit signal for long trades.

Exit Stock Indices Trading Signal for Sell trades

Traders should close short trade positions when price rises above the technical indicator.

If you are trading short i.e. The stock index price is below the stop and reversal, the SAR will move down every day, regardless of the direction that stock index price action is moving. The movement of the indicator depends on the number of pips that stock index prices move. When the SAR changes the direction then the stock indices market stock indices trend also changes to up. This generates the exit signal for short trades.

Exit Signal for Buy and Sell trades