Parabolic SAR Technical Analysis and Parabolic SAR Signals

Developed by J. Welles Wilder.

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

• In an Uptrend, the stop & reversal will trail below the market price
• In a down-wards trend, the stop and reversal will trail above the market price

XAUUSD Technical Analysis & How to Generate Trade Signals

This technical indicator provides excellent exit points.

Exit XAUUSD Signal for Buy trades

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

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

Exit Signal for Sell trades

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

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

Exit Trade Signal for Buy & Sell trades