SAR parameter setting: sar(4.2.2.20), 4 is the number of days parameter, 2 is the acceleration factor parameter, 2 is the acceleration factor increment, and 20 is the reverse critical parameter.
The calculation of SAR is mainly based on the calculation of the constantly changing SAR in each cycle, that is, the calculation of the stop loss price. Before calculating SAR, you must first select a period, such as n days or n weeks, etc. The parameters of n days or weeks are generally 4 days or 4 weeks. Next, determine whether the stock price in this cycle is rising or falling, and then calculate the SAR value according to the step-by-step reasoning method.
Calculating daily SAR as an example, the calculation formula of daily SAR is as follows:
SAR(n)=SAR(n-1)+AF[EP(N-1)-SAR (N-1)]
Among them, SAR(n) is the SAR value on the nth day, SAR(n-1) is the value on the (n-1)th day, and AF is the acceleration factor (or It is called the acceleration coefficient), and EP is the extreme price (the highest price or the lowest price).
Extended information:
When calculating the SAR value, you should pay attention to the following principles:
1. When calculating the SAR value at a time, you must start from the obvious high and low points. Starting on the nth day.
2. If the market is bullish, SAR (0) is the lowest price at the bottom; if the market is bearish, SAR (0) is the highest price at the top.
3. The acceleration factor AF is divided into upward acceleration factor and downward acceleration factor. If the market is bullish, it is an upward acceleration factor; if the market is bearish, it is a downward acceleration factor.
4. The initial value of the acceleration factor AF is always based on 0.02. If after buying a stock in a bullish market, the highest price on a certain day is higher than the highest price on the previous day, the acceleration factor AF will be increased by 0.02 and included in the calculation. However, the maximum acceleration factor AF does not exceed 0.2. The reverse is true in bearish markets as well.
Reference material: Baidu Encyclopedia-SAR indicator