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The parabolic stop and reverse (usually known as parabolic sar, or just parabolic) is a trend following indicator, that was developed by J. Welles Wilder.The parabolic stop and reverse indicator derives it name from the fact that when applied it resembles a parabola. The aim of psar indicator is to define the point at which we should change or exit our positions it is an upper chart indicator that sets an entry and exit point for trading a particular security based on time, price and direction (long or short). Parabolic sar or parabolic stop and reverse or simply parabolic is a time/price technical analysis indicator, which is very a useful trading tool in a trending market. As the price touches the parabolic arc, a new parabolic arc is created on the opposite side of the price action, you exit the current trade and enter into a new trade in the opposite direction (hence the name parabolic stop and reverse). You can also use the psar indicator to trail your positions, which is a popular application in manual or automated forex trading. Parabolic Stop and Reverse on a Chart:
Represented by the green dots.
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PSAR