Referring to Parabolic SAR, I would like to create a formula within Excel to determine the value of Parabolic SAR under column F,
[A] [B] [C] [D] [E] [F]
Date Open High Low Close Parabolic SAR
Does anyone have any suggestions?
Thanks in advance for any suggestions
The following steps are for calculating Parabolic SAR for a long position.
On the day that the trade is entered, the SAR is the lowest point taken from your previous trade. The extreme point is the highest high from your previous trade.
Gradually the SAR will moved higher and higher whether the price moves higher or not.
The Parabolic SAR is such that the faster the price curve moves, the faster the SAR and price converge.
The SAR is not placed within the range of the previous or the current period. The range is the vertical distance from the highest high to the lowest low. If calculations necessitate it, the lowest low over the 2 day period is used as the SAR for the following day. Otherwise, the Parabolic SAR for the next period is calculated with the following steps:
Subtract the current SAR from the EP, extreme point (highest high ) and multiply what's left by the acceleration factor.
The acceleration factor starts at 0.02 and increments by 0.02 everytime a new extreme point is achieved. The acceleration factor is capped at 0.20, afterwhich it just stays at 0.20.
Add the result to the current SAR.
In your formula the Step is the acceleration factor
SAR(next period)= SAR(current) + Acceleration Factor * (Extreme Point - SARcurrent)
When you open the indicator settings on a platform the default settings are Initial 0.02
What those refer to are the acceleration factors. Initial .02 then you have it max out at 20%