- Parabolic SAR Reversals
The Parabolic SAR often unfolds, especially in a sideways trend and in a market with high volatility. So, if the points were above the chart, and then began to form under it, or Vice versa, the indicator changed direction.
The reversal of a Parabolic SAR does not always mean that the price has also changed direction. In most cases, it only indicates that the graph and Parabolic SAR intersected. For this reason, opening trades based on parabolic SAR reversals should be done with caution.
You can enter the market for an increase, if after a downtrend on the chart formed 2 green candles, and under them there were points.
You can trade on the downside, if after an uptrend on the chart there were formed 2 red candles, and above them there were points.
Use additional analysis tools to confirm true trend reversals and filter out false signals.