Normalizing Parabolic SAR Distance by Envelope Width

Summary

The document describes an indicator that measures the distance between price and the Parabolic SAR, then divides that distance by the width of an Envelope channel. This normalization expresses the separation relative to the channel’s size; a magnitude of one means the price-to-SAR distance equals the full channel width. The indicator is shown as a histogram rather than as additional lines on a price chart.

Positive bars are interpreted as bullish momentum when the candle body is above the SAR, while negative bars represent bearish momentum when it is below. Larger magnitudes are presented as stronger acceleration, and blank readings occur when the SAR lies within the candle body or flips across it. The author suggests using reference levels to judge whether trends are strengthening and to filter breakouts that lack sufficient indicator movement. These are proposed interpretations and use cases, not reported test results. The document provides no parameter settings, market examples, or evidence that the levels reliably predict trend continuation or distinguish false breakouts.

Key ideas

• The indicator divides the price-to-SAR distance by the Envelope channel width.
• A normalized magnitude of one corresponds to a distance equal to the channel’s full width.
• Positive bars signal price above the SAR, while negative bars signal price below it.
• Blank readings can mark a SAR flip or a SAR position within the candle body.
• The suggested trend and breakout interpretations are not supported by reported performance tests.

Tags

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