ParabolicSAR (Function)

Disclaimer

The ParabolicSAR series function returns the parabolic stop values for the current bar and the next bar, as well as the probable position of the market.

Syntax

ParabolicSAR(AfStep, AfLimit, oParCl, oParOp, oPosition, oTransition)

Parameters

Name	Type	Description
AfStep	Numeric	Sets the acceleration increment factor.
AfLimit	Numeric	Sets the acceleration limitation factor.
oParCl	Numeric	Outputs the parabolic stop value for the current bar.
oParOp	Numeric	Outputs the parabolic stop value for the next bar.
oPosition	Numeric	Outputs the potential market position. 1 for long, -1 for short.
oTransition	Numeric	Outputs if the current bar market position has changed. 1 or -1 for reversal days  0 for holding days.

Returns (Integer)

The oParCl, OParOP, oPosition, oTransition output parameters return the parabolic stop values for the current day and the next bar, as well as the probable position of the market.  The ParabolicSAR itself returns 1.

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.

The input oParCl returns the calculation of Parabolic for the current bar and is useful when plotting a study. oParOp returns the calculation for the next bar and is most useful when incorporated into a strategy.  For example, 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.

Example

Vars: oParCl(0), oParOp(0), oPostion(0), oTransition(0);

Value1 = ParabolicSAR(0.02, 0.4, oParCl, oParOp, oPosition, oTransition);
Value2 = oParCl;
Value3 = oParOp;
Value4 = oPosition;
Value5 = oTransition;

Reference

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