Dots plotted above or below price that accelerate toward it as a trend persists. When price crosses the dots, the trend has flipped.
SAR(t+1) = SAR(t) + AF · (EP − SAR(t)) AF starts at 0.02, +0.02 per new extreme, capped at 0.20
Trailing stop in trending markets, mechanical flip signals on scalping timeframes.
Terrible in sideways markets — near-constant flips. Fixed acceleration doesn't adapt well to volatility regimes.
Nifty 50 daily bars with Parabolic SAR pre-loaded:
1 strategy uses Parabolic SAR: