The basic premise of the parabolic SAR is to create a trailing stop that is at first far enough away from the initial buy so retracements in the early stages of the trend don't stop you out of your position. As the trend matures, the trailing stop moves closer and closer at an accelerating rate to recent local lows of the current price until the stop is penetrated by adverse price movement and a sell signal is given. 5 year subscription to Working Money. Free book selection. Limited time offer.
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