How To Compute Parabolic SAR (Stop And Reverse) In C++?

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To compute the Parabolic SAR (Stop and Reverse) in C++, you can use the following formula:

  1. Choose an initial value for SAR and acceleration factor (often set to 0.02 and 0.2 respectively).
  2. For each subsequent day i, calculate the SAR value using the following formula:
  • If the trend is up: SAR(i) = SAR(i-1) + AF * (EP - SAR(i-1))
  • If the trend is down: SAR(i) = SAR(i-1) - AF * (SAR(i-1) - EP)


Where:

  • SAR(i) is the SAR value for day i
  • SAR(i-1) is the SAR value for the previous day
  • AF is the acceleration factor
  • EP is the extreme point, which is the highest high if the trend is up or the lowest low if the trend is down.
  1. Update the acceleration factor if an EP is reached, increasing it by 0.2 up to a maximum of 0.2.


By following these steps and implementing the formula in your C++ code, you can compute the Parabolic SAR values for a given dataset or time series.

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How to interpret the Parabolic SAR values for entry and exit points in C++?

The Parabolic SAR (Stop and Reverse) is a technical indicator that is used to determine the future direction of a security's price. It provides potential entry and exit points based on the momentum of the price movement.


To interpret the Parabolic SAR values for entry and exit points in C++, you can follow these general guidelines:

  1. Entry points:
  • When the Parabolic SAR values are below the price, it indicates a bullish trend. This can be seen as a signal to buy or enter a long position.
  • Look for a buy signal when the Parabolic SAR switches from being above the price to below the price.
  1. Exit points:
  • When the Parabolic SAR values are above the price, it indicates a bearish trend. This can be seen as a signal to sell or exit a long position.
  • Look for a sell signal when the Parabolic SAR switches from being below the price to above the price.


In C++, you can implement a simple trading strategy using the Parabolic SAR values by comparing them to the current price of the security. You can set up conditional statements to trigger buy or sell actions based on the Parabolic SAR values relative to the price.


It's important to note that the Parabolic SAR is just one tool and should be used in conjunction with other technical indicators and analysis to make informed trading decisions. Additionally, it's always recommended to backtest any strategy before implementing it in live trading to ensure its effectiveness.


What is the difference between Parabolic SAR and other trend indicators?

Parabolic SAR (Stop and Reverse) is a trend-following indicator that is unique in its ability to provide a visual representation of the price trends in a chart. Unlike other trend indicators such as moving averages, Relative Strength Index (RSI), or MACD, Parabolic SAR focuses on identifying potential reversal points in a trend.


One key difference between Parabolic SAR and other trend indicators is its placement on the price chart. Parabolic SAR appears as dots above or below the price, indicating potential reversal points. This makes it easier for traders to identify shifts in the trend direction.


Additionally, Parabolic SAR is known for its dynamic nature. As the price trends higher, the dots move closer to the price, while as the price trends lower, the dots move further away. This feature helps traders to quickly identify changes in momentum and potential trend reversals.


In contrast, other trend indicators typically rely on past price data to calculate their values, making them slower to respond to changes in the price trend. This can result in delayed signals and missed opportunities for traders.


Overall, the main difference between Parabolic SAR and other trend indicators lies in its focus on potential trend reversals and its dynamic nature, making it a valuable tool for traders looking to identify strong trends and capture profits.


How to plot the Parabolic SAR indicator in C++?

To plot the Parabolic SAR indicator in C++, you will need to calculate the SAR values using the formula provided in the indicator's definition. Once you have the SAR values, you can then plot them on a chart using a library like matplotlib or gnuplot.


Here is an example code snippet that calculates the SAR values and plots them using the gnuplot library:

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#include <iostream>
#include <vector>
#include "gnuplot-iostream.h"

// Function to calculate Parabolic SAR values
std::vector<double> calculateSAR(std::vector<double> high, std::vector<double> low, double acceleration, double maxAcceleration) {
    std::vector<double> sarValues;

    // Calculate SAR values here

    return sarValues;
}

int main() {
    // Sample high and low prices
    std::vector<double> high = {10.0, 12.0, 11.5, 13.0, 14.0};
    std::vector<double> low = {8.0, 10.5, 10.0, 11.5, 12.0};

    // Parameters for Parabolic SAR calculation
    double acceleration = 0.02;
    double maxAcceleration = 0.2;

    // Calculate SAR values
    std::vector<double> sarValues = calculateSAR(high, low, acceleration, maxAcceleration);

    // Plot SAR values using gnuplot
    Gnuplot gp;
    gp << "set title 'Parabolic SAR Indicator'\n";
    gp << "plot '-' with lines\n";
    for (int i = 0; i < sarValues.size(); i++) {
        gp << i << " " << sarValues[i] << "\n";
    }
    gp << "e\n";

    return 0;
}


This code snippet provides a basic example of how to calculate and plot the Parabolic SAR indicator in C++. You may need to modify the calculateSAR function to suit your specific requirements and data format. Additionally, make sure to install and configure the gnuplot library properly in your C++ environment before running the code.


How to backtest a trading strategy using Parabolic SAR in C++?

To backtest a trading strategy using Parabolic SAR in C++, you will need historical price data and a C++ programming environment. Here is a general outline of how you can proceed:

  1. Define your trading strategy: Start by defining your trading strategy using Parabolic SAR as a signal generator. For example, your strategy may involve going long when the price closes above the Parabolic SAR indicator and going short when the price closes below the Parabolic SAR indicator.
  2. Load historical price data: Import historical price data into your C++ program. This data should include open, high, low, and close prices for each time period (e.g., minute, hour, day).
  3. Calculate Parabolic SAR values: Use the historical price data to calculate the Parabolic SAR values for each time period according to the formula for Parabolic SAR.
  4. Implement your trading strategy: Using the Parabolic SAR values, implement your trading strategy in C++. This may involve determining entry and exit points based on the signals generated by the Parabolic SAR indicator.
  5. Backtest the strategy: Backtest your trading strategy by simulating trading decisions based on historical data. Keep track of trades, profits, losses, and other relevant metrics to evaluate the performance of your strategy.
  6. Analyze the results: Once you have completed the backtesting, analyze the results to determine the effectiveness of your trading strategy using Parabolic SAR. Look at metrics such as profit and loss, win rate, drawdown, and risk-adjusted returns to assess the performance of your strategy.


By following these steps, you can backtest a trading strategy using Parabolic SAR in C++ and evaluate its effectiveness in generating trading signals and profits.

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