Supertrend and Parabolic SAR

Trailing lines that flip.

A trailing line that flips side when the trend breaks support resistance flip Both of these draw a line that trails price, sitting below it in an uptrend and jumping above it when the trend flips. They are trend-following tools with a built-in stop. Supertrend Built from ATR, so it adapts to volatility. Line below price means long, above means short. Parabolic SAR Dots that accelerate toward price as the trend runs, tightening the stop as the move matures. Their shared weakness Both flip repeatedly in a range, generating a stream of losing signals. These are honest tools with one condition attached: they only work in trends. Check ADX first. In a sideways market they will flip you back and forth until the position is dead.

Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: Charts.