Parabolic SAR Oscillator [LuxAlgo]

This indicator is a detrended price series using the Parabolic Stop and Reverse (SAR) trailing stop, resulting in a bounded oscillator in the range (-100, 100). The SAR output is also normalized to obtain a noiseless oscillator which can complement the detrended price.

Settings

• Start: Initial value of the convergence factor used when a new trend is detected by the SAR
  
• Increment: Increment value of the convergence factor
  
• Maximum: Maximum value of the convergence factor
  

Usage

The price is detrended by subtracting the closing price to the SAR, this result is then normalized.

An up-trending market is indicated once the normalized SAR reaches -100, while a value of 100 indicates a down-trending market. One can anticipate trends when the normalized SAR crosses above/under 0.

The converging nature of the SAR trailing stop allows for the trader to obtain a very apparent leading oscillator.

Release Notes:

Minor changes.