Parabolic SAR Gold Trading Analysis & Parabolic SAR
Developed by J. Welles Wilder & is used to set trailing xauusd price stops. This Trailing Stop Loss Gold Order Indicator was originally developed to analyze trending Gold Trading Markets. It is drawn as a gold chart overlay indicator, that's on the xauusd price chart itself.
This is a very accurate gold indicator for providing exit points & thus it is used to set trailing stops & is usually referred to as the 'SAR' (stop-and-reversal) - Trailing Stop Loss Gold Order MT5 Indicator.
This Trailing Stop Loss Gold Order MT5 Indicator is drawn above or below the xauusd price - it is drawn as a series of dots. The length of movement of the SAR will be determined by the scale of the xauusd price movement.
In an upward Gold trend the parabolic SAR will be below the xauusd price. As long as the up gold trend continues then SAR will continue being below the xauusd price - Trailing Stop Loss Gold Order Indicator. When xauusd price move down and the parabolic SAR goes above xauusd price then the Gold trend reverses to bearish.
This trailing stop loss gold indicator uses a parabolic calculation to plot the series of dots, This means that if the xauusd price stops moving upwards with the same acceleration, the parabolic will continue with the same acceleration thus at some point the xauusd price will hit the indicator if it slows down too much.
Interpretation
This Trailing Stop Loss Gold Order MT5 Indicator provides excellent exit points. You should close long positions when price falls below SAR & close short positions when price rises above it.
If you are long, the Parabolic SAR - Trailing Stop Loss Gold Order MT5 Indicator will move up every day, regardless of the direction the xauusd price is moving. The amount this gold indicator moves up depends on the amount that xauusd prices move.
The same technical analysis will also apply to a downward gold trend, the parabolic SAR - Trailing Stop Loss Gold Order MT5 Indicator will be above the xauusd price and it should remain above price until the bearish down gold trend reverses.
The gold chart below shows an example of Parabolic SAR in an up gold trend gold market, You can see how it trailed below the xauusd price (Bullish Gold Trading Market) until when it was hit & the Gold trend reversed.
