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Bollinger Bands
Donchian Channels
Exponential Moving Average
Keltner Channels
Linear Regression
Parabolic SAR
Price by Volume
Simple Moving Average

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Parabolic SAR (stop and reversal)

The Parabolic SAR is a system developed by Welles Wilder that helps determine trailing stops for both long and short positions. Wilder recommended using the dotted lines below the price as a stop for a long position and the dotted lines above the price as a stop for a short position.

Wilder's goal was to capture as much of a trending move as possible. At the beginning of a move there will be a decent cushion between a stock's price and the dotted line, but as the move progresses the dotted line will get closer and closer to the stock's price thereby tightening one's stop.




This MMM chart shows how Parabolic SAR is displed on a stock chart. Wilder used the indicator to determine stops - not entries. Note that as the stock trended, the little blue dots slowly got closer and closer to the price chart. Wilder's goal was to capture as much of the move as possible using a mechanical system, and this indicator did a pretty good job as you can see.


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