Parabolic SAR Optimization: Check the Acceleration Rule

Parabolic SAR maintains a direction, an extreme price and an acceleration factor. The raw next value moves the previous SAR toward the previous extreme using that factor. The algorithm also applies reversal and prior-bar range constraints. The acceleration factor increases when a new extreme is reached in the active direction, subject to its maximum; it does not increase merely because another bar has elapsed.

With the previous SAR at 100 and the extreme at 110, a factor of 0.02 gives a raw update to 100.20. A factor of 0.006 gives 100.06 before reversal and range checks. Lowering the starting factor therefore reduces that initial movement toward the extreme under the same state; it does not make SAR inherently react faster. Later signals depend on the full price path and state updates.

A plotted reversal and an executable stop are different things. Define whether the strategy trades a confirmed reversal, maintains an order at an earlier known SAR value, or only uses SAR to exit. An opposite signal may close or reverse a position depending on the rules. Verify one trade’s signal time, order creation and fill before interpreting any optimized result.