Parabolic (Function)

The Parabolic series function returns the parabolic stop/reversal for the current bar.

Syntax

Parabolic(AfStep)

Returns (Double)

A numeric value containing the parabolic stop/reversal for the current bar.

Parameters

Name	Type	Description
AfStep	Numeric	Sets the acceleration factor increment, generally set to 0.02.

Remarks

This function is based on a relationship between time and price. Based on the first bar of a chart, the function first calculates a value at an extreme reference point above a bar, and as each bar progresses, the value calculated will approach each bar progressively. Once a calculated value falls within the High-Low range of a bar, the next value will be calculated at an extreme reference point below the next bar. Again, the incremental approach will resume from the bottom up, alternating again when the calculated value falls within the High-Low range of a bar.

The expression ’parabolic’ derives from the shape of the curve the values create as the results of this function are plotted on a chart.

This function provides the calculations necessary to generate order(s) for the Parabolic trading strategy described in Welles Wilder’s book New Concepts In Technical Trading Systems.

The value returned by this function is the Parabolic stop value on the current bar. See ParabolicSAR for more information.

Example

Plots the parabolic close value based on a .02 increment::

Plot1(Parabolic(.02));

Reference

Wilder, J. Welles, Jr. New Concepts in Technical Trading Systems (Greensboro, NC: Trend Research, 1978).