Parabolic SAR Oscillator: Smoothing the Close-to-SAR Difference

Summary

This short indicator note describes an oscillator built from the difference between closing price and Parabolic SAR. It defines the SAR calculation using configurable step and maximum parameters, then smooths the close-minus-SAR series with a simple moving average over a configurable period. The output is therefore a smoothed measure of price relative to the SAR line.

The note identifies the three inputs but does not specify signal thresholds, entry or exit rules, asset classes, or how the indicator should be evaluated. It provides no empirical results or comparison with other indicators. Traders would need to define interpretation and test the calculation against their own data, including choices about sampling frequency and parameter values.

Key ideas

• The oscillator starts with the difference between closing price and Parabolic SAR.
• A simple moving average smooths that difference over a configurable period.
• The Parabolic SAR step and maximum are additional configurable inputs.
• The note does not provide trading signals, parameter guidance, or performance evidence.

Tags

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