Parabolic SAR (“Stop and Reverse”) indicator helps to determine good exit and entry points. The indicator is very simple in use. Parabolic is placing dots, which define the trend.
How to interpret
When the dots are below the price, the trend is bullish. Parabolic signals bearish reversal when it crosses the price bottom-up and forms 3 descending dots above the candles.
When the dots are above the price, the trend is bearish. Parabolic signals bullish reversal when it crosses the price top down and forms 3 ascending dots below the candles.
Note that Parabolic is good to use on a trending market, with long rallies and declines. On a sideways market there is a high risk of getting false signals.
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