Technical analysis · Intermediate

Parabolic SAR

A 1-minute lesson from the MarketPro academy, one of 26 in technical analysis.

Last reviewed 15 September 2026 by the MarketPro research desk · Editorial policy

Short answer

Parabolic SAR (Stop and Reverse) plots a series of dots above or below price that track a trend and are designed to flip position when the trend appears to reverse. When price is trending upward, the dots sit below the candles and gradually rise, tightening as the trend matures; in a downtrend, the dots sit above the candles and gradually fall.

Parabolic SAR (Stop and Reverse) plots a series of dots above or below price that track a trend and are designed to flip position when the trend appears to reverse.

When price is trending upward, the dots sit below the candles and gradually rise, tightening as the trend matures; in a downtrend, the dots sit above the candles and gradually fall. A flip of the dots from one side to the other signals a potential change in trend direction.

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Trailing stop concept: Because the dots accelerate toward price as a trend extends, the indicator is often used as a dynamic trailing stop rather than an entry signal.
Choppy markets: In sideways or range-bound conditions, Parabolic SAR tends to flip frequently and can generate a series of unreliable signals.
Acceleration factor: The rate at which the dots tighten is adjustable, with a faster setting reacting sooner but with more false flips.

Parabolic SAR works best in markets already displaying a clear directional trend, and traders often combine it with a trend-strength gauge like ADX so its signals are filtered by whether a trend genuinely exists.

Lesson 24 of 26 in Technical analysis

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Written and reviewed by the MarketPro research desk

MarketPro is a trading-signal and trading-education app operated by Harajuku Holdings LTD (Cyprus). Our signal desk publishes and tracks every trade idea in-app, and every page here is checked against the app's live behaviour before publishing. Last reviewed 15 September 2026. How we produce signals and content · About MarketPro

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