What is Parabolic SAR?

This is a very interesting and useful indicator. 

You can use it for the following purposes: 

Trend 

------We are in an uptrend when dots are below the candles.

------Downtrend is when dots are above the price. 

Entry Signals

 ------ Buy signals ( Only in an uptrend market ). The first dot below the candle

 ------ Sell Signals ( Only in a downtrend market ). The first dot above the candle. 

Stop loss 

 ------ Long positions: Put the stop loss below the dot. ( You can move the SL every time to use as a trailing SL.) 

------ Short positions: Put the stop loss above the dot. ( You can move the SL every time to use as a trailing SL.) 

 As I said before to avoid false entries as much as possible only trade in the direction of the long time trend. Use a trend indicator or big MA to determine the trend direction.

 Settings for AF numbers ( Acceleration Factor ) can be changed but I prefer the default settings.