- Trading on the Direction of the Trend
You can use the Parabolic SAR to trade on the direction of price movement or when the trend reverses.
Observe the chart. If the dots do not change direction, this means that there is no trend reversal signal and you can open a trade on the trend.
The trend is ascending if the Parabolic SAR dots are beneath the chart and the parabola is being built bottom up.
The trend is descending if the dots are above the chart and the parabola is being built top down