How do I set up the SAR indicator, and how does it help in trading?

Parabolic SAR is an indicator used to determine market trends and signal trend reversals. It looks like a Moving Average, but its movements are faster, and that’s why it can change its position in relation to the asset price. 

How to calculate the Parabolic SAR

The Parabolic SAR is calculated for long and short positions. 

For short positions, it is calculated by the formula:

• SAR (i) = ACCELERATION * (LOW (i - 1) - SAR (i - 1)) - SAR (i - 1)

For long positions, it is calculated by the formula:

• SAR (i) = ACCELERATION * (HIGH (i - 1) - SAR (i - 1)) + SAR (i - 1)

Where:

• SAR (i-1) is the value of the Parabolic SAR for the previous candle
• ACCELERATION is Acceleration factor, it starts at 0.02 and increases by 0.02 up to a max. of 0.2
• HIGH (i - 1) is the maximum price for the previous period
• LOW (i - 1) is the minimum price for the previous period

So, the Parabolic SAR value grows if the current price is higher than the previous, and on the contrary, the Parabolic SAR value decreases if the current price is lower than the previous. 

How to use Parabolic SAR

The indicator line below the price line is a bullish signal.

When the price line crosses the Parabolic SAR line from above, it means that the price movement may change its direction.

When it happens, you receive a SELL signal.

When the indicator line is above the price line, it is a bearish signal.

When the asset price crosses the indicator line from below, it signals that the asset price may start growing. You receive a BUY signal.

How to set up Parabolic SAR

To set up signals based on a Parabolic SAR movement, open the Alerts tab. 

• Pick the exchange.
• Select the coin pair for which you want to receive alerts.
• In the Select indicator field, pick SAR - Parabolic SAR.
• Click on the Set Alert button.

That’s it. Now, you will receive alerts as soon as a Buy or a Sell signal comes. 

If you want to change the alert settings, click on the Open Settings button in front of the alert and implement the required changes.

To delete the alert, click the Delete Signal button in front of the alert you want to delete.