Friday, March 17, 2017 12:19:39 AM
Step Increments
The Acceleration Factor (AF), which is also referred to as the Step, dictates SAR sensitivity. SharpCharts users can set the Step and the Maximum Step. As shown in the spreadsheet example, the Step is a multiplier that influences the rate-of-change in SAR. That is why it is referred to as the Acceleration Factor. Step gradually increases as the trend extends until it hits a maximum. SAR sensitivity can be decreased by decreasing the Step. A lower step moves SAR further from price, which makes a reversal less likely.
SAR sensitivity can be increased by increasing the step. A higher step moves SAR closer to the price action, which makes a reversal more likely. The indicator will reverse too often if the step is set too high. This will produce whipsaws and fail to capture the trend. Chart 6 shows IBM with SAR (.01, .20). The step is .01 and the Maximum Step is .20. Chart 7 shows IBM with a higher Step (.03). SAR is more sensitive in chart 7 because there are more reversals. This is because the Step is higher in chart 7 (.03) than chart 6 (.01).
The Acceleration Factor (AF), which is also referred to as the Step, dictates SAR sensitivity. SharpCharts users can set the Step and the Maximum Step. As shown in the spreadsheet example, the Step is a multiplier that influences the rate-of-change in SAR. That is why it is referred to as the Acceleration Factor. Step gradually increases as the trend extends until it hits a maximum. SAR sensitivity can be decreased by decreasing the Step. A lower step moves SAR further from price, which makes a reversal less likely.
SAR sensitivity can be increased by increasing the step. A higher step moves SAR closer to the price action, which makes a reversal more likely. The indicator will reverse too often if the step is set too high. This will produce whipsaws and fail to capture the trend. Chart 6 shows IBM with SAR (.01, .20). The step is .01 and the Maximum Step is .20. Chart 7 shows IBM with a higher Step (.03). SAR is more sensitive in chart 7 because there are more reversals. This is because the Step is higher in chart 7 (.03) than chart 6 (.01).
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