Technical analysis · updated October 21, 2026
What is the Parabolic SAR indicator
Parabolic SAR is a series of dots drawn below the price when the trend is up and above it when the trend is down. When the price crosses the dots, the trend reverses and the dots flip to the other side.
Parabolic SAR formula
SAR tomorrow=SAR today + AF × (Extreme − SAR today)
- Extreme
- The highest price in the uptrend (or the lowest, in the downtrend).
- AF
- The acceleration factor: starts at 0.02 and rises by 0.02 with each new extreme, up to 0.2.
How to read Parabolic SAR
Dots above the pricedowntrend
Price close to the dotsa possible reversal
Dots below the priceuptrend
On our pages you see the current direction of the Parabolic SAR.
When Parabolic SAR can fool you
Flat market: the dots flip from side to side often, for no reason.
Related terms
Questions about Parabolic SAR
What is Parabolic SAR used for?
Mostly to know where you would place a stop-loss that follows the price.
These explanations are for information only. They are not a recommendation to buy or sell.
Back to the glossary