Forex encyclopedia

Forex market has its driving forces. Such forces are participants of market. For clarity, it is accepted to divide them into several types: bulls, bears, pigs, rabbits, hogs, lambs. In this zoo, driving forces are exactly bulls and bears. Their clear intentions and determination can greatly influence currency rates. This terminology was adopted from stock market, where emotions play not the last role in movement of quotes, thus, analogy with animals and their typical behaviour provides a clear idea on psychology of market participant.
Parabolic SAR is the technical indicator developed by Welles Wilder for analyzing trend movements. The first time it was announced in a famous book “ New Concepts in Technical Trading Systems” published in 1976. SAR stands for as “stop and reverse”. Parabolic SAR is one of a few indicators that signalize about closing of positions. In many respects Parabolic is similar to a moving average with the only difference that SAR can change position against price. Under ascending tendency, the indicator is drawn under prices (candles, bars), under descending tendency it is put above prices. When price crosses Parabolic line, reversal of the indicator takes place.
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