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intermediatePremiumTechnical Analysis

Parabolic SAR

The Parabolic SAR (stop and reverse) plots a trailing series of dots above or below price that follow a trend and flip when it reverses. This article explains how the dots mark trend direction, act as a dynamic trailing stop, accelerate as a trend extends, and signal an exit or reversal when price crosses them — plus its key weakness of whipsawing in sideways markets and why it pairs well with a trend filter like ADX.

11 min readPublished 26 June 2026

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TrendlinesATR

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Key terms

ATRBollinger BandsBreakoutCandlestickDivergenceDojiFibonacci RetracementGap

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ADX & DMI

The Directional Movement Index (DMI) and Average Directional Index (ADX) are Wilder's tools for measuring trend direction and, crucially, trend strength. This article explains the +DI and -DI lines (which side is winning), the ADX line (how strong the trend is, regardless of direction), the conventional 25/20 thresholds for trending versus ranging, how DI crossovers signal direction, and how to use ADX as a filter rather than a standalone signal.

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