Parabolic SAR (Stop and Reverse) Indicator Definition and Uses

The parabolic SAR indicator, developed by J. Wells Wilder, is used by traders to determine trend direction and potential reversals in price. The indicator uses a trailing stop and reverse method called SAR, or stop and reverse, to identify suitable exit and entry points. Traders also refer to the indicator as the parabolic stop and reverse, parabolic SAR, or PSAR.