add psar (parabolic stop and reverse)
Angel Clark
shared this idea
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Howard Beckett
commented
Freestockcharts.com has a similar function called "Volatility Stop" or "Vstop" that uses a configurable "look-back" and multiplier that it applies to the stock's ATR during the look-back period. It then ratchets the calculated stop so that a "Buy" stop can never move lower when the stock's price declines. When the stock's price goes below the "Buy" stop, it flips and becomes a "Sell" stop above the current price. Sell stops can only ratchet downward as the stock's price falls. If the price rises above this stop it again "flips", becoming a "Buy" stop again. This produces a binary, Buy or Sell, recommendation rather than VV's Buy-Hold-Sell standard. Less ambiguity and the ability to configure the look-back and multiplier to suit your own sensitivity to change or risk makes it a very handy indicator. The stop doesn't tighten over time as the PSAR appears to do but it does establish a stop-and reverse recommendation pattern.