Working Money: Stay In The Market With Stop-And-Reverse by Rudy Teseo
If you hate being out of the market, you should
take a look at this system.
The parabolic time/price system indicator was
developed by J. Welles Wilder. Often referred to
as parabolic SAR or simply SAR (for “stop and
reverse”), the term comes from its appearance as
a parabola when viewed on a chart.
A SuperCharts help file describes SAR as “a system designed
to allow more leeway or tolerance for contratrend price
fluctuation early in a new trade, and then to progressively
tighten a protective trailing stop order as the trend matures.”
The indicator is a stop-setting entry and exit trading system
designed to keep the investor in the market at all times. The
idea is that if a trade is not continually producing profits, then
it should be liquidated. But instead of waiting for the price to
bottom and then re-entering with a long position, why not
take advantage of the profit opportunities on the way down?