24 basic indicators (5) -- Sr

Stop Loss indicator-SAR

The SAR indicator is also called a parabolic indicator or a stop loss operation point indicator. Its full name is "Stop and reveres, or SAR". Is it by American technical analysis master Wells? Wells Wilder is a simple, easy-to-learn, and accurate medium-and short-term technical analysis tool.
Section 1 principle and Calculation Method of SAR indicators

I. Principle of SAR indicators

We know from the full English name of the SAR indicator that it has two meanings. The first is "stop", meaning stop loss and stop loss. This requires investors to set a stop price before buying or selling a stock to reduce investment risks. This stop-loss price does not remain unchanged, but it also needs to be adjusted continuously as the stock price fluctuates. How to effectively control the potential risks without missing the opportunity to earn more profits is the goal pursued by every investor. However, the stock market is unpredictable, and the trend of different stocks varies in different periods. If the stop-loss position is set too high, the stock may be sold when it is adjusted to fall back, however, the stock to be sold has now started a new round of growth and missed the opportunity to make a larger profit. On the contrary, if the stop-loss position is set too low, the risk cannot be controlled at all. Therefore, how to accurately set the stop position is the purpose of various technical analysis theories and indicators, and SAR indicators have their unique functions in this respect.
The second layer of the SAR index is "reverse", meaning reverse and reverse operations. This requires investors to set a stop-loss position before deciding to invest in stocks, when the price reaches the stop-loss price, the investor should not only close the stocks bought in the early stage, but also reverse sell the stocks while closing the positions to maximize the profits. This method can be operated in the securities market with a short-selling mechanism, but currently the domestic market in China does not allow short-selling. Therefore, investors mainly adopt two methods, first, when the stock price falls below the stop-and-loss price, the system throws the stock price and holds the currency. Second, when the stock price breaks through the pressure of the SAR index, it buys the stock in time or holds the stock to rise.

2. Sar indicator calculation method

Similar to indicators such as macd and DMI, the calculation formula of SAR indicators is cumbersome. The Calculation of SAR is mainly for the calculation of the variable SAR in each cycle, that is, the calculation of the stop loss price. Before SAR calculation, You must select a period, such as N days or N weeks. The parameters for N days or weeks are generally 4 days or 4 weeks. Next, let's determine whether the stock price in this cycle is rising or falling, and then calculate the SAR value based on the Gradual Inference Method.
The daily SAR calculation formula is as follows:
SAR (n) = SAR (n-1) + af
Here, SAR (n) is the SAR value on the nth Day, and SAR (n-1) is the value on n-1.
AF is the acceleration factor (or acceleration factor), and EP is the extreme price (highest or lowest price)
When calculating SAR values, pay attention to the following principles:
1. a sar value must start from the nth day of the recent significant period.
2. If it is a Bullish market, SAR (0) is the lowest price in the near future. If it is a bearish market, SAR (0) is the highest price in the near future.
3. The acceleration factor af is differentiated between the upstream acceleration factor and the downstream acceleration factor. If the market is bullish, It is the upward acceleration factor; if the market is bearish, It is the downward acceleration factor.
4. the initial value of the acceleration factor af is always 0.02. If the maximum price of a day is higher than the maximum price of a day after buying a stock in a Bullish market, the acceleration factor af increases by 0.02 and is integrated into the calculation. However, the maximum acceleration factor af is 0.2. On the contrary, the bearish prices are also similar.
5. If the calculated SAR value for a given day is higher than the lowest price for the current or previous day in a Bullish market, the minimum price for the current or previous day shall be the SAR value for that day. If the SAR value calculated on a certain day is lower than the highest price on the current day or the previous day, the maximum price on the current day or the previous day is the SAR value on a certain day. In short, the SAR value cannot be within the range of market price changes on the current day or the previous day.
6. For any change in the market, the acceleration factor af must be recalculated from 0.02.
7. The parameters of the baseline period for SAR metric cycle calculation are 2, for example, 2 days, 2 weeks, and February. The parameter change range of the baseline period is 2-8.
8. The calculation method and process of SAR indicators are cumbersome. For investors, as long as they master the algorithm process and principle, they do not need to calculate the SAR value themselves in actual operations, more importantly, investors must flexibly master and use the methods and functions of SAR indicators.

Section 2 General judgment criteria for SAR indicators

Because SAR indicators are easy to understand, easy to operate, stable and reliable, SAR indicators are also called "Dummies" indicators and are widely used by investors, especially small and medium retail investors.

I. general judgment criteria for SAR indicators

The general criteria for SAR indicators include:
1. When the stock price breaks through the SAR curve from below the SAR curve, the buyer signal indicates that the stock price may rise in a round, and investors should promptly buy the stock.
2. When the stock price moves upwards beyond the SAR curve and the SAR curve moves upwards at the same time, it indicates that the stock price has risen and the SAR curve has provided strong support for the stock price, investors should firmly hold shares to be up or below the bargain and add code to buy shares.
3. When the stock price breaks down the SAR curve from the top of the SAR curve, in order to sell signals, it indicates that the stock price may fall in a round, and investors should sell the stock quickly and timely.
4. When the stock price breaks down the SAR curve, the SAR curve moves down at the same time, indicating that the falling trend of the stock price has been formed, and the SAR curve puts a huge pressure on the stock price, investors should firmly hold on to the coin or cut off the balance.

Ii. Functions of SAR indicators

Compared with other technical indicators, SAR indicators provide great help for general investors in market research and determination, as shown in the following three aspects:
1. Currency holding
When the share price of a stock is under the SAR index and continues to move downward, investors can hold the currency all the way until the stock price breaks the pressure of the SAR index and sends a clear signal of buying, to consider whether to buy stocks.
2. shareholding pending rise
When the stock price of a stock stays above the SAR index and continues to move upwards Based on the SAR index, investors can stay up until the stock price breaks below the support of the SAR index and sends a clear sell signal, to determine whether to sell the stock.
3. Clear stop loss
The SAR indicator has a very clear stop loss function, which can be divided into stop loss and stop loss. Sell stop loss refers to the fact that when SAR sends a clear buying signal, no matter what price the investor sold in the past, whether or not the loss, the investor should promptly buy the stock and hold the shares to rise. When the SAR indicator sends a clear sell signal, no matter what price the investor used to buy the stock, whether it is profitable or not, the investor should sell the stock in time and hold the currency.

Iii. Advantages of SAR indicators

SAR indicators have the following advantages:
1. The operation is simple and the trading point is clear. The operation can be performed only when a sales signal is displayed. It is especially suitable for small and medium investors who have not entered the market for a long time, rich investment experience, and lack of trading skills.
2. It is suitable for the "bull stocks" that are continuously pulled up and won't be easily shaken by the main warehouse and washed disk.
3. It is suitable for the "Bear shares" that are falling down in a row and won't be fooled by the rebound on the way down.
4. Suitable for mid-and short-term band operations.
5. Although the long-term use of SAR indicators cannot buy the lowest price or sell the highest price, it can avoid the risk of long-term lock and avoid missing the bull stock market.

Section 3 Special judgment criteria for SAR indicators

I. Operation angle and running time of SAR indicators

1. When the SAR curve runs downward at an angle greater than 45 degrees, it means that the air is powerful, the stock price falls rapidly, and the stock price will continue to fall. At this time, investors should firmly hold on to the coin and should not easily rebound.
2. When the angle of the SAR curve is greater than 45 degrees, if the SAR curve has been running up for a long time and the stock price has increased too much in the short term, it indicates that the power consumption of multiple parties is too high, the stock price may be reversed at any time. At this time, investors should pay close attention to the trend of the SAR curve. Once the SAR indicator sends a clear sell signal, they should resolutely leave the market.
3. When the SAR curve is running upwards at an angle greater than 45 degrees, if the SAR curve is just running upwards, the multi-party forces are accumulating and the stock price continues to rise. At this time, investors should firmly hold their shares to stay up.
4. When the downward direction of the SAR curve is less than 45 degrees, and the downward direction of the SAR curve continues to run for a long period of time, the secondary direction should be at least three months later. Once the stock price breaks through the SAR curve, it indicates that the medium-and long-term downward trend of the stock price may end, and investors can start to buy stocks at an bargain.
5. When the angle of the SAR curve is less than 45 degrees, if the SAR curve has been down for a long period of time, when the low-position disc consolidation interval is at least 3 months, it indicates that the power of the air has been exhausted and the power of multiple parties has begun to strengthen. A new round of rise in the stock price has been launched and the stock price will continue to rise. At this time, investors should firmly hold their shares to stay up.

2. Analysis and Determination of SAR indicators on different software

Because of the two typical stock market analysis software, Qian Long and analysts in China, SAR indicators have two different analysis interfaces. Therefore, SAR indicators have different analysis methods in these two types of analysis software.
Analysis and Determination of SAR indicators on analytics' Software
In analytics' software, the SAR indicator structure is relatively simple, mainly composed of the SAR curve and the stock price K-line. The analysis, determination, and analysis of SAR indicators in the analysis software have been discussed above. We will not discuss them here.
Research and Determination of SAR indicators on Qian Long Software
In the Qianlong software analysis system, the stock price curve in the SAR indicator is represented by the U.S. line, while the SAR curve is composed of different red and green circles, each circle corresponds to a transaction period, such as a transaction day, week, month, and so on. Therefore, in addition to the similar content mentioned above, it is mainly focused on the U.S. line, the relationship between the red circle and the Green Circle.
1. Red Circle
When the U.S. line runs above the SAR curve, it indicates that the current stock price is continuously rising, and the SAR indicator circle is red, which means that investors can continue to hold shares. Then, investors can use the number of SAR values and the existence of red circles as the stop loss standard. Once the closing price of the stock falls below the price marked by SAR and the Red Circle of the SAR indicator disappears, the stock should be sold in time.
2. Green Circle
When the stock price runs below the SAR curve, it indicates that the current stock price is falling continuously, and the SAR indicator circle is green, it means that investors should continue to focus on currency holding until the SAR indicator sends a clear buying signal again.

Section 4 practical skills of SAR indicators

The structure of SAR indicators is relatively simple, and the analysis and determination methods are concise and clear. For ordinary investors, it is a rare analysis tool. To make the prediction result more accurate, we will introduce the analysis method of weekly SAR and weekly macd. The following uses the weekly SAR metrics (, 20) and weekly macds (, 9) on analytics' software as an example to illustrate the sale and wait-and-see features of SAR metrics.

I. Sales Signals

1. After a long period of falling prices, the stock price's K-line is getting closer and closer to the Green Circle where the weekly SAR index has been under pressure) the growth direction breaks through the Green Circle of weekly SAR indicators. When weekly macd indicators form a "golden cross" near the zero line, this means that the decline of the stock price has ended and the stock price will reverse, this is a medium-and long-term buy signal from the weekly SAR indicator. At this time, investors should promptly buy stocks. (22-1.
2. When the stock price K-line runs above the weekly SAR indicator, once the stock price falls below the weekly SAR indicator, the weekly SAR curve changes from a red circle to a downward Green Circle, at the same time, when the weekly macd indicator starts to form a "dead cross" at a high level, this is the medium-and long-term sales signal sent by the weekly SAR indicator. At this time, investors should promptly sell shares. (22-2.

Ii. Currency Ownership Signal

1. When the stock price's K-line keeps running upwards Based on the Red Circle of the weekly SAR curve and the running direction of the macd curve and DIF curve in the weekly macd indicator is also upward, this means that the rising trend of the stock price will continue. This is the midline shareholding signal issued by the weekly SAR indicator. As long as the red circle does not disappear, investors will be able to hold shares all the way up. (22-3.
2. When the stock price's K-line falls below the weekly SAR curve, it is squashed down by the Green Circle of the weekly SAR curve, and the running direction of the macd curve and DIF curve in the weekly macd indicator is also downward, this means that the medium-and long-term decline of the stock price will continue. This is the long-term currency holding signal sent by the weekly SAR indicator. As long as the Green Circle does not disappear, investors should hold the currency all the way.