Parabolic ( SAR )

The Parabolic is a Time / Price system for the automatic setting of stops. The stop is both a function of price and of time. The system allows a few days for market reaction after a trade is initiated after which stops begin to move in more rapid incremental daily amounts in the direction the trade was initiated. For example, when a long position in futures is taken the stop will move up regardless of price direction. However, the distance that the stop moves up is determined by the favorable distance the futures price has moved. If the price fails to move favorably within a certain period of time, the stop reverses the position and begins a new time period.

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