# Parabolic Stop and Reverse

Author: Optuma Team Last updated: Feb 9, 2021 02:49

## Overview

Developed by Welles Wilder, the Parabolic Stop and Reverse indicator derives its name from the fact that when applied it resembles a parabola. The Parabolic Stop and Reverse has been designed to set price stops and provides excellent exit points.

The PSAR will also project forward the PSAR value for the next day.

### Calculation

The Parabolic Stop and Reverse is calculated as follows:

``````SAR Tomorrow = SAR Today + AF(EP Trade * SAR Today)

Where: SAR = Stop and Reverse
AF = Acceleration Factor
EP = Extreme Price

The SAR stop level value is drawn on the day in which it is in effect.
``````

The PSAR tool will switch between long and short depending on price action:

To add the tool to your chart, select the tool from the Price tool group, and left-click on the chart or indicator on which you wish to add the tool. Optuma will then draw the tool using the default settings.

## Scripting Formula: PSAR()

The PSAR() function can give the value of the level, but because we calculate the next day’s value it won’t work in a scan. Instead we have a ‘State’ condition, where a state of 1 is in a ‘long’ condition (ie the PSAR is below the bar) and 0 is short. So to scan or test for when the PSAR changes from above the price action to below to indicate a potential positive change of trend use the following:

``````PSAR().State ChangeTo 1
``````

## Actions & Properties

### Actions

Copy Data to Clipboard: Will copy the tool’s values to the clipboard which can then be inserted into a spreadsheet, for example, allowing for further analysis.

Apply Settings to All: When multiple Parabolic Stop and Reverse tools have been applied to a chart, page or workbook, this action can be used to apply the settings of the one selected to other instances of the tool. This is a great time saver if an adjustment is made to the tool - such as line colour - as this allows all the other Parabolic Stop and Reverse tools in the chart, page or entire workbook to be updated instantly.

Copy Tool: Allows you to copy the selected tool, which can then be pasted onto a different chart window.

Move to Back: If the tool is displaying in front of other tools or indicators clicking this action will move the tool view to the background.

Move to Front: If the tool is displaying behind other tools or indicators on the chart, clicking this action will bring the tool to the forefront.

Restore Default Settings: Click this action if you have adjusted the default settings of the tool, and wish to return to the standard properties originally installed with Optuma.

Save Settings as Default: If you have adjusted any of the tool’s properties (colour, for example) you can save the adjustments as your new default setting. Each time you apply a new Parabolic Stop and Reverse to a chart, the tool will display using the new settings.

Delete: Deletes the tool from the chart.

### Properties

Tool Name: Allows you to adjust the name of the tool, as it’s displayed in the Structure Panel.

Price Unit: Option to manually set and adjust the price unit used in the calculation of the Parabolic stop and reverse, the default value is 0.020.

AF Limit: Option to manually set and adjust the acceleration factor used in the calculation of the Parabolic stop and reverse, the default value is 0.200.

Set Enter Date: When selected it is then possible to set the start date.

Enter Date: Only available when Set Enter Date is selected. Left click the calendar to set the desired start date for the Parabolic Stop and Reverse.

Long Colour: Sets the colour of the Parabolic Stop and Reverse when the price is above the SAR.

Short Colour: Sets the colour of the Parabolic Stop and Reverse when the price is below the SAR.

Plot Style: Allows you to change how the tool is displayed on your chart. There are 6 options available: Line, Dot, Histogram, Step, Shaded, Shaded Step.

Line Style: The Line Style property allows you to adjust the type of the line displayed. There are 8 options available: Solid, Dots, Dash, Dash Dots, Long Dash, Long Dash Dot, Long Dash Dot Dot, Stippled.

Line Width: Allows you to adjust the width of the line. Moving the slider bar to the right increases the thickness of the line.

Fill Up / Down Barrier: When the Plot Style is set to Shaded you are able to adjust the barrier value, the default value is 0.00.

Fill Up Colour: When the Plot Style is set to Shaded you are then able to alter the Fill Colour for the tool.

Fill Down Colour: When the Plot Style is set to Shaded you are then able to alter the Fill Colour for the tool.

Transparency: When the Plot Style is changed to Shaded, you then are able to adjust the shading transparency. Moving the slider to the left will increase the transparency.

Offset: This provides the option to offset the Parabolic Stop and Reverse from the chart, to adjust the offset value use the blue up and down arrows.

Tool Transparency: Use this slider bar to adjust the transparency of the tool. Moving the slider to the left will increase the transparency of the tool.

Visible: Un-tick this checkbox to hide the tool from the chart.

Show in Price Scale: When selected the current Parabolic Stop and Reverse value will be displayed in the Price Scale.