Parabolic SAR (PSAR)
Developed by Welles Wilder, Parabolic SAR (Stop and Reversal) indicator helps the trader in assessing the direction of the stock’s movement. As the name suggests – SAR (Stop and Reverse) not only suggests the trader to stop holding the current position but also to reverse the position when the existing position is closed.
If the Parabolic SAR is running below the asset’s price then the trader is advised to hold the position on the long side. When the Parabolic SAR moves above the price, then the trader is advised to close the long position and initiate a short position.