What are SAR indicators?
SAR index is also called parabola index or stop loss turning operation point index. Its full name is "stopand reviews", abbreviated as SAR. It is created by American technical analysis master WLS Wilder. It is a simple, easy to learn and relatively accurate medium and short-term technical analysis tool. This kind of index is similar to the principle of moving average, and it belongs to the analysis tool of both price and time. Next, we will talk about the specific SAR indicators.
SAR index has two meanings. One is "stop", which means stop loss or stop loss, which requires investors to set a stop loss price before buying or selling a stock to reduce investment risk. And this stop loss price is not always the same, it is with the fluctuation of the stock price and constantly adjust. The second meaning of SAR index is "reverse", which means reverse operation. This requires investors to set a stop loss position before deciding to invest in stocks. When the price reaches the stop loss level, investors should not only close the positions of the stocks they bought earlier, but also carry out reverse short operation at the same time of closing positions, so as to maximize the return.
Due to the advantages of easy to understand, easy to operate, stable and reliable, SAR index is also known as "fool" index, which is widely used by investors, especially small and medium-sized retail investors.
1、 Stop loss technique of SAR index
SAR index is also known as parabola index. With the gradual rise of stock price, the rising speed of SAR will accelerate. Once the speed of stock price rise fails to keep up with SAR or the stock price reverses and falls, SAR will keep a close eye on it. When the stock price falls below SAR, investors can slip away. This indicator represents the price and turning point of buying or selling. But the index is invalid in consolidation.
When the stock price starts to break through the SAR curve downward from the top of the SAR curve, the selling signal indicates that a downward trend of the stock price may unfold, and investors should sell the stock quickly and timely. When the stock price breaks through the SAR curve downward, it continues to move downward, and the SAR curve also moves downward at the same time, which indicates that the downward trend of the stock price has been formed. The SAR curve poses a great pressure on the stock price, so investors should firmly hold the currency and wait and see or lose pounds when the price is high.
The stop loss index is divided into stop loss and stop loss. Buy stop loss refers to that when SAR sends out a clear buy signal, no matter what price the investor sold in the past and whether the stock is in loss, the investor should buy the stock in time and hold the stock to rise. Sell stop loss refers to that when SAR index sends out a clear sell signal, no matter what price the investor bought before or whether he made a profit, the investor should sell the stock in time and wait and see with currency.
When the share price of a stock is above the SAR index and moves upward by relying on the SAR index, investors can hold shares all the way and wait until the stock price breaks down the support of SAR index and sends out a clear sell signal, and then consider whether to sell the stock.
In the software analysis system, the stock price curve in SAR index is represented by American line, while SAR curve is composed of red and green circles. Each circle corresponds to a trading period (such as a trading day, week, month, etc.). When the US line runs above the SAR curve, it indicates that the current stock price is in a continuous upward trend. At this time, the circle of SAR index is shown in red, which means that investors can continue to hold stocks. After that, investors can use the SAR value and the existence of the red circle as the stop loss standard. Once the closing price of the stock falls below the price marked by SAR and the red circle of SAR index disappears, the stock should be sold in time.
2、 Operation precautions of SAR index
SAR index is easy to operate, with clear buying and selling points. It is especially suitable for small and medium-sized investors who have not entered the market for a long time, have little investment experience and lack trading skills. Suitable for the continuous pull up of "bull stocks", will not be easy to be the main shock warehouse and wash; suitable for the continuous shady "bear stocks", will not be deceived by the rebound on the way down, suitable for medium and short-term band operation. Although SAR index can not buy the lowest price or sell the highest price, it can avoid the risk of long-term lock up and avoid missing the bull stock market.
When the stock price deviates from the parabolic SAR index, the stop loss signal will appear in the parabolic index SAR. At this time, "stop loss operation" should be adopted. If the stock price drops unexpectedly after using other technical analysis indexes, investors should use the parabolic index SAR to help them stop loss operation.
The above is a small series of SAR indicators related to the introduction, I hope to help you.