What 80 Parabolic SAR Flips Say About the Next 10 Days
Parabolic SAR is usually taught as a picture. Dots under the price mean uptrend, dots over the price mean downtrend. That is the definition, and it is where most traders stop reading. The dot is a trailing stop. The distance between price and the dot is the part that pays, because it tells you how much room the trend has before it breaks. A stock sitting 1 percent above its dot is one candle away from a flip. A stock sitting 6 percent above its dot can absorb a bad day and keep going. Same signal, two completely different trades. In this video I show you the full chain in order on one ticker, Salesforce. Read the dot. Measure the gap as a percentage. Scan for the flips that just happened, not the ones that happened three weeks ago. Set the strike off the dot instead of off a round number. Then test the signal against every flip the stock has produced since 2019, so you know whether the pattern is a real edge or a random day wearing a costume. In this video you'll learn: 1. Cold open on the chart. What the dots are actually plotting, and why a dot under price is a stop and not a buy signal 2. The mechanic of a flip. Price touches the dot, the dot jumps to the other side, the trend label changes. Where the flip is real and where it is noise 3. Reading the gap. How to convert the distance between price and dot into a percentage, and what a tight gap versus a wide gap says about how fragile the trend is 4. Finding fresh flips in the Option Samurai scanner. Using the Parabolic SAR filter with the Flipped to Bullish preset instead of scrolling charts one at a time 5. Tightening the room in Advanced View. Setting the SAR percent range from 0 to 2 and constraining how many bars ago the flip occurred, so you get recent strength and not stale strength 6. From signal to a real trade. A short put on Salesforce struck at 220, sitting just below the 220.29 dot, with the bid, the spread, the probability of expiring worthless and the annualized return all on screen 7. Stress testing it. The free SAR backtest on the same ticker, showing what happened over the 10 trading days after each Flipped to Bullish reading against the average day, across 80 flips The point is not that Parabolic SAR works. The point is that you can measure whether it works on the specific stock you are about to trade, before you put money on it. Most traders never run that check, then wonder why a textbook setup behaved differently than the textbook. ⸻ About Option Samurai Option Samurai helps you find better trades, faster. Our scanner and tools are built for serious options traders who want clarity, speed and an edge. ⸻ 🚀 GET STARTED 🌐 Start the 14 day free trial and build the scan yourself: https://optionsamurai.com/ 📖 Run the backtest on your own ticker here: https://optionsamurai.com/blog/backtesting-sar-filter/ ⸻ 👍 Like the video if you want the scanner filters, the strike logic and the backtest numbers to keep coming 🔔 Subscribe for more scanner filters, strike logic and backtest numbers 💬 If you have a stock you want tested against the SAR flip, drop the ticker in the comments and we will run it. Chapters: 0:00 What the dots are actually plotting 0:27 Reading the gap 0:48 Finding fresh flips in the scanner 1:07 Tightening the room in Advanced View 1:20 From signal to a real trade 1:52 Stress testing it: 80 flips since 2019
