Beginner Bear PSAR Question
 - Thu, Jul 17, 2003 - 05:17 PM

Decisively nailed as the chart shows.

My take on this is that from a long or short position the PSAR (Parabolic Stop Reversal) is useful if the stock reverses above or below this line.

If I was long and the index dropped below the line it should be an indication that 1) it is time to bail out of that long position, closing it without lingering around to find out what it will do next and 2) take a short position.

The reverse would also be true.

Assuming this is true, do I use the PSAR time frame as the length of my "expected" stay in the long or short position (in this case the 90 day PSAR) or is the position "floating," i.e. I need to check on it every so often to insure I am not missing the PPT, or other events, to target it?  

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Re: Beginner Bear PSAR Question
 - Thu, Jul 17, 2003 - 05:32 PM

I wouldn't use psar for entry/exit points in trading, but as one more indicator of the weight of the evidence.

I personally do not follow psar.

Re: Beginner Bear PSAR Question
 - Thu, Jul 17, 2003 - 07:42 PM (IP: )

Would not use it for entrance points but helpful for exit points and/or to keep one with the trend. Often, the day after a signal is given it will back track giving you a better entrance point. Also, if it is reversed in a day or two, it gave a false signal and the move is usually quite strong after a false signal is given. Best use of psar is on the weekly charts for the position trader as it keeps you with the trend for long period of time, i.e., weeks and months. Less than a day is not all that helpful. Best used in conjunction with other tools such as EW, MACD.