Combining MACD and Parabolic SAR in the TAT Trend Indicator

Summary

The TAT indicator combines a normalized Parabolic SAR distance with the difference between the MACD line and its signal average. The components are scaled with separate multipliers, then combined into a main series whose exponential moving average serves as a signal line. The indicator is presented as a trend tool: an upward cross of the signal line indicates a positive trend, while a downward cross indicates a negative trend.

The description provides parameter values and implementation logic for calculating both components, but it gives no backtest, performance statistics, or rules for entries, exits, and risk control. Crossovers can lag or produce whipsaws, especially in sideways markets, and the material does not assess those limitations. Its claims should therefore be treated as an indicator proposal rather than evidence of a profitable trading strategy.

Key ideas

• The indicator combines a MACD difference with the distance between price and Parabolic SAR.
• Separate multipliers weight the two components before they are combined.
• An exponential average of the combined series acts as the signal line.
• The author interprets upward and downward signal-line crosses as trend changes.
• The document supplies no performance testing or risk-management rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.