What is the Parabolic SAR indicator?

Parabolic SAR (Stop and Reverse) is a trend-following indicator that is used to identify the direction of a trend and potential reversal points. It is commonly used in technical analysis to determine when to enter or exit a position in the market.

The Parabolic SAR indicator is plotted as a series of dots above or below the price bars on a chart. When the dots are below the price bars, it indicates a bullish trend, and when the dots are above the price bars, it indicates a bearish trend. The distance between the dots and the price bars indicates the strength of the trend.

One of the unique features of the Parabolic SAR indicator is that it can switch directions during a trend, indicating a potential trend reversal. When the dots switch from being below the price bars to above them, it is a signal to sell or exit a long position, and when the dots switch from being above the price bars to below them, it is a signal to buy or enter a long position.

Overall, the Parabolic SAR indicator is a popular tool used by traders to identify trends and potential reversal points in the market. It can be used in combination with other technical indicators to develop a comprehensive trading strategy.

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