On the evening of October 24th, AICoin researchers conducted a live graphic and textual sharing of the SAR Advanced Indicator Strategy in the AICoin PC End-Group Chat-Live. The following is a summary of the live content.
I. Intelligent AI Analysis of Cryptocurrencies
Important Notice: AICoin has launched an intelligent AI.
1. Intelligent AI Analysis of INJ
Interpreted by intelligent AI, it is bullish for the future.
2. Intelligent AI Analysis of ALGO
The interpretation given by intelligent AI remains "bullish."
3. Intelligent AI Analysis of BTC
The interpretation given by intelligent AI is "bearish." Intelligent AI analyzes its weakening upward momentum, indicating a possible pullback. We can pay attention to whether there is a possibility of a short-term decline in Bitcoin.
II. Understanding the Concept and Parameters of SAR
1. SAR Concept
SAR is a trend-tracking indicator composed of a series of points, known as the SAR indicator.
Comment: These points are located above or below the price, reflecting the current trend direction.
The full name of SAR is Stop And Reverse, meaning that when the price reaches these points, trading direction should be stopped and reversed.
2. SAR Principle and Understanding of Related Parameters
The SAR algorithm has two parameters: initial acceleration factor (AF0) and maximum acceleration factor (AFmax).
Taking the above indicator parameters as an example, the settings are 2 and 20.
The initial acceleration factor is 0.02, meaning the incremental acceleration factor for each period is 0.02.
The maximum acceleration factor is 0.2, meaning the acceleration factor cannot exceed 0.2, which is 2 and 20 in this case.
The basic idea of this algorithm is:
When the price rises, the SAR point is below the price, reflecting support.
When the price falls, the SAR point is above the price, reflecting resistance.
SAR can serve as related price support and resistance levels. When the price crosses the SAR point, it indicates a trend reversal, and the trading direction should be adjusted at that time.
SAR plays a very important role in market judgment, as it can identify support, resistance, and reversals. The default parameters are 2 and 20.
3. Example: BTC
Performance of SAR on the 4-hour chart.
Comment: SAR indicator is providing strong support.
MACD is also forming a "skyward refueling" pattern.
Divergence indicators are signal warnings for members, providing systematic support for many indicators.
Real-time alerts for top and bottom divergence signals on the candlestick chart are supported. Experience the above signals by opening: https://www.aicoin.app/vip/signal
III. Three Major Signals of SAR
1. Signal One:
SAR point is below the price, indicating an upward trend, so long positions should be taken.
SAR point is above the price, indicating a downward trend, so short positions should be taken.
Here is the translation of the provided markdown:
For example, the SAR indicator describes the mid-term trend and is recommended to be used for periods of less than 4 hours, similar to the 30-minute period for ETH here.
Usage recommendation: If you have sufficient experience, you can combine it with other indicators for a higher success rate; if you are not very familiar, you can consider taking it slow and trading in segments, with a good stop-loss. Simply put, it is used as a support and resistance indicator.
2. Signal Two:
When the price crosses above the SAR point, the trend changes from downward to upward, so short positions should be closed and long positions should be opened.
When the price crosses below the SAR point, the trend changes from upward to downward, so long positions should be closed and short positions should be opened.
This is a breakthrough below, a trend reversal signal. Let's take the example of ETH on the 4-hour chart:
3. Signal Three:
When the SAR point and the price show divergence, meaning the price makes a new high or low while the SAR point does not, or vice versa. This indicates signs of a possible weakening or reversal of the current trend, so trading should be done cautiously or positions should be reduced.
This signal three can be summarized as:
The price continues to make new highs, but the SAR does not, indicating a top divergence.
The price continues to make new lows, but the SAR does not, indicating a bottom divergence.
Conclusion: Top divergence indicates a bearish outlook, while bottom divergence indicates a bullish outlook, similar to the usage of MACD divergence.
4. Sharing a Script - SAR Indicator Alert Push
1) Script
// @version=2
sar = sar(high, low, 4, 2, 1, 2)
down = sar[1] < low[1] && sar > high
up = sar < low && sar[1] > high[1]
alertcondition(up, title='Turning Upwards')
alertcondition(down, title='Turning Downwards')
signal = up ? 1 : (down ? -1 : 0)
plotColumn(signal, title='Turning Upwards above Zero Line/Turning Downwards below Zero Line')
2) Copy the above script to the custom indicator system, save it, set the alert, and display it on the candlestick chart
PRO version candlestick chart, signal alerts, indicator win rate - buy any of the three types of memberships, and you will receive a limited-time custom indicator membership and on-chain data membership for free. Experience the opening address: https://www.aicoin.app/vip/chartpro
Recommended Reading
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