IntermediateMAD Academy0:44Indicators

A Stop That Only Moves One Way

Parabolic SAR is a trailing stop with an accelerator built in, and it is designed to eventually be hit.

0:44 · 6 scenes

This lesson is part of a MAD Academy plan.

What the Lesson Covers

  1. 0:00Parabolic SAR is not a signal generator. It is a trailing stop with an accelerator.
  2. 0:05The rule. The dot follows price and never retreats. It tightens each time a new extreme prints.
  3. 0:14Why it accelerates. The acceleration factor rises with every new extreme, so it closes in faster over time.
  4. 0:23Where it fails. In a sideways market it flips constantly, because there is no trend for it to trail.
  5. 0:32The correct pairing. Check trend strength first, then let the dots manage the exit. Never the reverse.
  6. 0:39It is exit management, and it is only as good as the trend behind it.
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Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
A Stop That Only Moves One Way — MAD Academy Training Video · MadStockAlerts