StockFetcher Forums · General Discussion · Parabolic SAR<< >>Post Follow-up
glgene
523 posts
msg #37391
Ignore glgene
8/10/2005 1:29:08 PM

What happens to make "Parabolic SAR" turn to a buy or sell? What is the numerical equation? Use IWM (the ETF for Russell 2000) as an example:

August 9 (price)
----------------
Open .. $65.89
High ... $66.07
Low ... $65.45
Close . $65.84

Parabolic SAR: $68.20

It's currently on a sell (green dot above price). What specifically would make it become a buy (green dot below price)? I know that Parabolic SAR is (by textbook definition) used for stops, but in the scenario above, I'm using it as a true buy-sell signal.



TheRumpledOne
6,358 posts
msg #37400
Ignore TheRumpledOne
8/10/2005 8:56:08 PM

Check out this thread:

DMI and Parabolic SAR magic

In this forum.




glgene
523 posts
msg #37407
Ignore glgene
8/10/2005 10:58:15 PM

I read the post and threads -- and they are great -- but I still don't understand the SPECIFIC equation for a Parabolic SAR. Go back to my original post, and using IWM with the numbers I show, at what SPECIFIC point would an "above parabola (sell)" turn to a "below parabola (buy)?" Numbers, please. Not just the general concept.

I understand the SPECIFIC equation for an MA, RSI, MACD, etc., but I don't understand the SPECIFIC equation for a Parabolic SAR. Please enlighten me, TheRumpledOne (or anybody else). Please get specific -- using the specific example I gave with IWM and its corresponding numbers for that day.

Thank you in advance.

GL Gene


jclaffee
81 posts
msg #37408
Ignore jclaffee
8/10/2005 11:47:19 PM

glgene,

This response does not fit your criteria for an answer but I'll offer it anyway!

Look at www.tradertalk.com/tutorial/para.html

Jim




PeterJerome
23 posts
msg #37411
Ignore PeterJerome
8/11/2005 2:36:03 AM

gene, the Parabolic SAR is a true reversal system. Every stop point is also a 'reverse' point, ie. switch from Short to Long. The SAR is a function of both time & price and will move in the direction of the trade every day, regardless of what price action does. The distance the SAR moves depends on the favorable distance the price has moved. The formula is a bit complicated, but if you are interested in this system, I suggest the book, New Concepts in Technical Trading Systems, by J.Welles Wilder Jr. He developed the system.
good luck,
Peter.



glgene
523 posts
msg #37413
Ignore glgene
8/11/2005 7:27:37 AM

Thanks to those of you sent a reply. I will check the web site that was mentioned and, if possible, review Wilder's book. I want to clearly understand Parabolic SAR.

GL Gene


glgene
523 posts
msg #37439
Ignore glgene
8/12/2005 12:36:46 PM

At market close yesterday (8/11/05) IWM was at $66.32
At market close yesterday, IWM Parabolic SAR was at $67.67

Is that the spread? If IWM had closed at $67.68, would
its Parabolic SAR shifted from a sell to a buy?


glgene
523 posts
msg #37440
Ignore glgene
8/12/2005 1:15:45 PM

I think I answered my own question. Follow me.

...........................6/29/05 ....6/30/05 ... (end of day values)

Stock Price (IWM) $63.84 --- $63.70
Parabolic SAR ..... $64.19 --- $62.07

Price/SAR ............. 99.45% .. 102.62%
Action ..............Sell mode ... Buy mode

I used Stockcharts.com to get the above info (stock price and SAR values). The last two rows are my own ideas.

If I am wrong, please correct me. Eager to learn.

GL Gene


StockFetcher Forums · General Discussion · Parabolic SAR<< >>Post Follow-up

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