The World of Technical Indicators You Don't Know About | Episode 1 Parabolic [Yasushi Yamanaka]
Moving averages, RSI, and other major indicators watched by many market participants are classic analyses, but they do not necessarily suit everyone. Here, with insights from Koji Yamanaka, a professional analyst deeply versed in indicators, we will expand your perspective and choices in deep technical analysis by explaining indicators that do not appear often in this magazine.
Koji Yamanaka Profile
Director at Ascendant. Joined Bank of America in 1982, Vice President in 1989, Proprietary Manager in 1993. In 1999, Deputy Head of Foreign Exchange Funds Department at Nikko City Trust Bank. Founded Ascendant in 2002.
Official Blog：Ascendant/Y Koji Yamanaka provides foreign exchange information delivery site
Twitter：https://twitter.com/yasujiy
※This article is a reprint and revised edition of an article from FX攻略.com February 2021 issue. Please note that the market information described in the main text may differ from current market conditions.
Origin of the name and features
Parabolic is a technical indicator that signals trend reversals, developed by J. W. Wiley Jr., who created many classic indicators. Along with “RSI” and “Directional Movement (DMI),” it is one of the indicators first introduced in his 1978 book “New Concepts in Technical Trading Systems” (Japanese title: “Wiley’s Introduction to Technical Analysis”). The official name is the “Parabolic Time/Price System,” and its Stop-and-Reverse (SAR) for exits resembles a parabolic curve, which is the origin of its name.
SAR progresses only in the direction of the position held (rising if long, falling if short). When SAR approaches and reaches the price, it marks a turning point for trading (a switch in direction), and the SAR also reverses its direction.
Parabolic is a technical indicator that, not merely using simple levels like recent highs and lows, indicates a stop price considering price and the passage of time. It was already introduced in books in the 1970s, making it a groundbreaking indicator in that regard.
