I say that the formula for calculating Parabolic SAR is not simple, but it is important to understand it to know this indicator better.
Parabolic SAR is an “early” calculated indicator as it takes today's prices into account to define tomorrow's SAR. The general algorithm that defines Parabolic SAR is as follows:
SARi + 1 = SARi + alfa (PE - SARi)
The SARi and SARi + 1, values represent today's and tomorrow's SAR values, respectively.
The Extreme Point, or PE in the above equation, is the record obtained in each uptrend or downtrend observed, representing the highest price hit in an uptrend, and the lowest price hit in a downtrend. In each period, if a new maximum (or minimum) price is reached, you must update the formula PE.
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