Parabolic SAR

A technical indicator developed by J. Welles Wilder Jr. that plots dots above or below the price chart to signal potential trend reversals. "SAR" stands for "Stop and Reverse," reflecting the indicator's original use as a trailing stop system. When the dots flip from below to above the price, it generates a sell signal, and vice versa. Trend-following traders use it in conjunction with other indicators to time entries and exits in strongly directional markets.