There are many
different indicators which are used for different indications in the technical
analysis. The indicators are used to generate equity tips in the form of equity
intraday tips. The main indicators are divided in the broad categories of
momentum based indicators and oscillator indicators. The parabolic SAR is a
trend following indicator and helps to identify the current trend as well as to
follow the trend. The parabolic SAR is represented by the dots above and below
the price levels. If the dots are above the price levels a down trend has just
started or is in place. Similarly if the dots are below the price levels the
uptrend has just started or the uptrend is continuing.
The parabolic SAR is
used along with an oscillator indicator like ADX or RSI to determine the
confirmation of the buy and sell signals. The RSI is an indicator which is used
to specify the overbought and oversold levels. RSI stands for Relative Strength
Index and this index takes a value between 0 and 100. The lower values specify
that the market is oversold and higher value that the market is overbought. The
values 30 and 70 are taken as the threshold values. The values below 30 are
taken as oversold values and the value above 70 are taken as overbought levels.
Using RSI and parabolic SAR confirms the buy and sell signals and there are
high probabilities that the trade will be profitable.
Similar to RSI the ADX
can be also be used in conjunction with Parabolic SAR to find accurate buy and
sell signals. The ADX help to determine the strength of the trend. Thus if the
trend is strong and uptrend, the buy trade can be placed. Money Classic Research is an advisory
firm which use the strategies like stated above to generate accurate equity tips.
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