PSAR

Parabolic Stop & Reverse

Parabolic Stop and Reverse (PSAR) is used to determine the direction of an asset's trend and potential reversal points. It appears as dots placed above or below the price chart. When the PSAR dots are below the price, it signals an uptrend, and when they are above, it signals a downtrend. Traders use PSAR to set stop-loss orders and identify potential buy or sell signals based on trend changes. The PSAR is calculated using the previous period's extreme price and an acceleration factor, typically set to 0.02, which increases incrementally by 0.02 up to a maximum of 0.20