How to use SAR to spot reversal signals, 6th indicator challenge 🤔

What is SAR indicator?
SAR indicator stand for "stop and reversal system".
SAR is a technical indicator used to determine the direction and potential reversals of a price trend. It is developed by J. Welles Wilder Jr., the creator of the relative strength index (RSI).
(Oic !)

Firstly, if u have no idea how to use SAR & want to know more, u may wanna check out @Meta Moo post on SAR :

Meta Moo :Get to know SAR indicator and post your learning results!

Meta Moo :Part One: Can dots reveal a bullish/bearish trend?

Meta Moo :Part Two: Find the bull & bear with dots & lines

I'm just going to move to the practical usage of SAR using $SPDR S&P 500 ETF(SPY.US)$. U gotta keep up with my pace if u don't want to get sallow by the bearish 🐻 market in 2022. (SAR is also new to me )

1. Using SAR to spot direction and potential reversals
P1:
Select SAR indicator which should be there by default .

How to use SAR to spot reversal signals, 6th indicator challenge 🤔

P2.1:
In P2.1, u will see the circled dot along the red dotted line, a weird colour which is slightly light green / White dot.

In P2.1, the start of the slightly light green / White dot along the red dotted line show a potential reversals & a downtrend may happen. A few days later as shown in P2.1, it's indeed a downtrend .

P2.2:
Vi-versa

P2.2 shows the light green / White dot along the green dotted line = a potential reversals & a uptrend may happen.

2. Using SAR with MACD
P3.1:

As u can see in P3.1,
light green / White dot along the red dotted line + MACD orange line below blue line = A potential reversals & a downtrend may happen.

P3.2:
Vi-versa

In P3.2,
Light green / White dot along the green dotted line + MACD orange line above blue line = A potential reversals & a uptrend may happen.

3. Using SAR with RSI
P4.1:

Light green / White dot along the red dotted line + RSI < 50 = A potential reversals & a downtrend may happen.

P4.2:
Vi-versa

Light green / White dot along the green dotted line + RSI > 50 = A potential reversals & a uptrend may happen.

Why 50?
Because it is the medium (50%) .

Oh , by the way... @Meta Moo used 3 RSI lines as a patterns observation & it's quite interesting. U may wanna check it out :
Meta Moo :Part Two: Find the bull & bear with dots & lines

4. Using SAR with RSI+MACD
Last but not least,
P5.1:

Lastest chart data of $SPDR S&P 500 ETF(SPY.US)$ on 4/7/2022 in P5s,
Light green / White dot along the green dotted line + RSI < 50 = huh , ahlehleh?
Light green / White dot along the green dotted line + MACD orange line above blue line = A potential reversals & a uptrend may happen.
Wth 🤦‍♂️ is happening ?

Let's further look at P5.2 below:
P5.2:

Light green / White dot along the green dotted line + RSI < 50 = huh ... ?
Light green / White dot along the green dotted line + MACD orange line above blue line = A potential reversals & a uptrend may happen.
So, my reasons & conclusion is:
It may be a bull trap = short-term bullish.
1. RSI < 50
2. MACD is still in the negative values zone although MACD orange line above blue line

I'm NOT trying to...

...you. I'm just stating out the matter of facts & my point of views, that's all = Peace .

5. Summary on SAR

NOTE: ALL INDICATORS ARE JUST ONLY A GUIDELINE FOR A TREND PATTERNS & U SHOULD NOT BE OVERLY DEPENDENT ON IT. IT'S USUALLY A BETTER USAGE FOR SHORT-TERM TRADERS / SHORT-TERM INVESTORS = LONG-TERM INVESTORS SELDOM USE INDICATORS.

Extra informations:
Milk The Cow :Tech Analysis To Identify Trend Using MACD 📈 Day 2 (AMC As Example)

Milk The Cow :TA Challenge: How to use RSI to tell whether a stock is overbought or oversold?🤨

DYODD before investing

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