News from across the continent
24/07/2012 08:43:28 PM
23/07/2012 07:28:21 PM
23/07/2012 08:46:45 AM
18/07/2012 08:29:05 AM
17/07/2012 09:37:46 AM
16/07/2012 09:34:21 AM
10/07/2012 01:04:45 PM
05/07/2012 08:54:18 AM
Publish Date19/06/2012 09:06:40 AM
Last Update19/06/2012 09:25:17 AM
Traders are frequently attempting to mitigate their losses by learning how to manage their desks. One of the most efficient technical indicators that are designed for risk management is known as Parabolic SAR.
So many traders know this technical indicator as a (stop and reverse) indicator which was created by J. Welles Wilder with the goal of defining market trends.
The figure below is a simple chart with Parabolic SAR applied using the default inputs of 0.02 step and 0.2 limit.
Click on the image for a larger view
The box to the left shows that the market started to move higher and then after building a base, the dots of Parabolic SAR moved higher as the price continued to move bullishly.
The box to the left explains the case when the market decides to carve a potential peak where we can see the intersection of price with the Parabolic SAR plot. The candlestick immediately followed the intersection, then plots above indicating a confirmed reversal. As price continues to move to the downside, Parabolic SAR is plotted above price until another intersection takes place.
Briefly speaking, when the indicator continues to print higher, this gives the trader the potential to move their stop beyond break-even, locking up gains as the position moves in the traders’ favor and when price retraces and crosses the Parabolic SAR plot, the trader can close their trade in anticipation of a potential trend change against the trader’s initial position.
Opinions expressed at ICN.com are those of the individual authors and do not necessarily represent the opinion of ICN.com or its management, shareholders, affiliates and subsidiaries. ICN.com has not verified the accuracy of any claim or statement made by any independent writer and is reserved as their own and ICN.com is not accountable for their input. Any opinions, news, research, analysis, prices or other information contained on this website, by ICN.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. ICN.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The data contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market prices, meaning prices are indicative and not appropriate for trading purposes. ICN.com does not bear any responsibility for any trading losses you might incur as a result of using this data.
©2012 ICN.COM. ALL RIGHTS RESERVED