## How is PSAR calculated?

The Parabolic SAR (PSAR) indicator uses the recent extreme price (EP) with an acceleration factor (AF) for determining where the indicator dots will appear. It is calculated as follows: Uptrend: PSAR = Prior PSAR + Prior AF (Prior EP – Prior PSAR)

### How do you read a PSAR indicator?

The parabolic SAR indicator is graphically shown on the chart of an asset as a series of dots placed either over or below the price (depending on the asset’s momentum). A small dot is placed below the price when the trend of the asset is upward, while a dot is placed above the price when the trend is downward.

#### What is the PSAR indicator?

The PSAR – parabolic stop-and-reverse – indicator is plotted on a price chart and is intended to signal when an uptrend or downtrend in a security’s price is about to reverse. > The indicator tends to produce good results in a trending environment, but should not be used when the price starts moving sideways.

Keep in mind that the parabolic SAR is a lagging indicator. In other words, it starts slowly, gains momentum with the trend, and often lags behind the price. All lagging indicators are prone to creating false signals and thus favor trend-following strategies that can withstand smaller market stop-outs.

How do you calculate PSAR in Excel?

These values are:

1. G4 =E4 -The current low.
2. H4 =D4 -The current high.
3. I4 =H4-G4 -EP minus PSAR.
4. J4 =J2 -Initial acceleration factor.
5. K4 =J4*I4 -EP-PSAR multiplied by Acc Factor.
6. I4 bull -bull signifying an uptrend.

## How accurate is parabolic SAR?

Statistical Results. The parabolic SAR showed results at a 95% confidence level in a study of 17 years of data.

### How do I trade with PSAR?

How to Trade Using the Parabolic SAR Indicator

1. The SAR dots beneath the current market price point to an uptrend;
2. The SAR dots above the market price point to a downtrend;
3. Enter a position when the price penetrates the SAR – buy if the price crosses above the SAR and sell if the price crosses below the SAR;

#### What is the best parabolic SAR settings?

The SAR Indicator Settings The best settings are the standard Parabolic parameters. The initial factor is 0.02, the price step is also 0.02, and the maximum AF is 0.2. Most traders use these settings for the Parabolic.

Which timeframe is best for parabolic SAR?

The longer timeframe is the 15 minute chart, and the lower timeframe is the one minute. From the 15-minute EUR/JPY chart, we can see that the trend is continually declining, based on the most recent parabolic SAR reading, for more than two hours. This provides the trade direction on the one-minute chart​​.