Welles Wilder's Parabolic
Time/Price System, (Parabolic SAR) is used to set trailing
stops where you can exit or reverse your position. Usually, a trader
would close a long position when price falls below the SAR, and
close a short position if price rose above the SAR. If your position
is long, the SAR rises every day, whatever direction price moves.
The SAR move up depends on how far price moved. Day trading systems
using this indicator tend to be highly automated, making their running
costs high. The calculation for parabolic SAR is far too complicated
for this brief introduction.