**Parabolic Stops And Reverse (SAR)(PROFESSIONAL subscribers only):**
This is a price and time trading system introduced by Welles Wilder in his 1978 book "New Concepts in Technical Trading Systems". The SAR (stop and reverse) indicator trails the price as the trend extends over time. In an uptrend, the indicator rises below the price line and in a downtrend the indicator falls above the price line. When the price trend breaks below or above the indicator line, the indicators stops and reverses.

The algorithm used for calculating the SAR:

**In an uptrend:(Long Trade)**
*Current SAR = Prior SAR + Prior AF(Prior EP - Prior SAR)*
Where EP (Extreme Point) is the highest high in the current trend

AF (Acceleration Factor) which starts at 0.02 and increases by 0.02 each time a new high is made in current trend. Stops increasing at a certain limit (0.2)

In an uptrend, never move tomorrow's calculated SAR above yesterdays or today's low. If the calculated SAR is higher than either of these values then use the lower low of the two as the SAR and use this value for SAR calculation for the next day.

If tomorrow's SAR is greater than tomorrow's low, then close the position and reverse the trade.

**In an downtrend:(Short Trade)**
*Current SAR = Prior SAR - Prior AF(Prior SAR - Prior EP)*
Where EP (Extreme Point) is the lowest low in the current trend

AF (Acceleration Factor) which starts at 0.02 and increases by 0.02 each time a new low is made in current trend. Stops increasing at a certain limit (0.2)

In a downtrend, never move tomorrow's calculated below the high of yesterday or today. If the calculated SAR is lower than either of these values then use the higher high of the two as the SAR and use this value for SAR calculation for the next day.

If tomorrow's SAR is less than tomorrow's high, then close the position and reverse the trade.

As shown above, to plot the Parabolic Stop and Reverse system, specify the entry date as follows (

*YYYY-MM-DD HH:MM*), the position type (Long or Short), the AF step (0.02) and the maximum AF (0.2) parameter. Make sure the Parabolic Stops checkbox is checked.

Please note that if your entry date is for a date prior to the data currently showing the stop function will not calculate.

After plotting the stop line, a detailed trade report is displayed in the same options menu. This is illustrated above. You can pop out the report for an unobstructed larger font view by clicking the 'pop up' button.

After you plot the chart, the Parabolic Stops will be plotted starting from the entry position to the exit position if the conditions are met, otherwise the trade will remain open. The stop will reverse when it is closed and a new trade is initialized. The lines and signals for each trade are also drawn.

For a long trade: A green arrow is drawn at the entry and a red arrow is drawn at the exit if the position is closed.

For a short trade: A red arrow is drawn at the entry and a green arrow is drawn at the exit if the position is closed.