Forex glossary
Parabolic SAR (Stop And Reverse)
Wilder's Parabolic SAR plots points above or below price using the prior SAR, the trend extreme and an acceleration factor. Common settings use a 0.02 step and 0.20 maximum. Crossing the level changes the indicator's state; closing or reversing an actual position requires a separate order or program.
Illustrative example
How does it work in practice?
Assume prior SAR of 100, an extreme of 110 and acceleration of 0.02. The basic update gives 100.2; a practical implementation also applies prior-candle extreme constraints and a reversal rule.
A case to work through
A chart point without an order
Hypothetically, previous SAR=50, extreme=60 and acceleration=0.04; the account has no stop order.
- The basic update gives 50+0.04×(60−50)=50.4.
- The indicator plots a value; without a separate order or code it does not close the position.
What follows? Check active terminal orders separately from the chart.
Example boundary: Implementations apply additional constraints and reversal rules; fills can differ from the level.
A useful distinction
Parabolic SAR (Stop And Reverse) / Trading Plan
SAR calculates indicator levels; a trading plan decides whether and how they become order rules.
Check your understanding
Calculate a basic indicator step without equating it with an account stop.
Show the answer and explanation
80.4
80+0.02×20=80.4 before additional constraints.
Direction and strength tools
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Related terms
Sources and documentation
- MetaTrader 5 – Parabolic SAR
The prior SAR, trend extreme and acceleration-factor update.
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The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.