Dow ends almost flat

The Dow Jones index almost ended flat but there was hope since it was the best week in 3 years on Wall Street.

There was some positive from an important economic indicator - unemployment rate dropped to a 2.5 year low. The street is still wary of the Europe situation though. The S&P 500 is now very near to the 200 day moving average, a technical indicator, that hints at good times to come if breached from the bottom.

Parabolic SAR

The Parabolic SAR indicator was proposed and developed by W. Wilder, who also discovered the more famous RSI and DMI indicators. Parabolic SAR displays the suggested trailing stop losses in visual terms. I'm leaving out information on the formula because its very complex and may distract the user. We'll focus more on the behavior of the indicator and how to make the best use of it.

The indicator also helps you in taking a position by displaying the indicator and the price on the same chart. The buy and sell signals are generated when the upper or lower SAR cross the price line.

The main variables that make up the Parabolic SAR are Step and Maxmum Step. Wilder suggests keeping the values at 0.02 and 0.20. Parabolic SAR performs best in trending markets

The higher the value of the step, higher is the sensitivity of the indicator with respect to price change, but that does not mean that a very high step is desirable. When it is too high, the indicator is too volatile and this limits its usefulness. The Maximum Step is used for adjusting the SAR as price moves. The lower the Maximum Step, the higher the distance to the trailing stop from the price.

Trading Emotions

Fear
No Risk No Return. This phrase is well known and it is not required for most of us. But for those who find taking the plunge difficult, it applies strongly. In addition to this, you will not learn unless you dive.
Despair
Despair generally arises when you are not applying your rules and are taking the wrong bets. The thinking process is retarded when despair arises. Take a break, take a deep look and you will generally find that you are doing something very wrong. That is, if you are following generally known good principles of trading.You will notice that in your bad times, if you have very little capital left, you will start compromising on the very principles that will give you any hope of recovering from your losses.
Doubt
When in doubt, don’t. Follow this simple rule and you will be better off in trading. There are many factors that influence the markets. At any point in time, even technical indicators, support levels, patterns may conflict each other. For example, there is a buy signal on the basis of 15 min charts but weakness in the 1 hour chart. If you cannot verify and come to a clear conclusion, just leave that opportunity alone. There will be many more coming your way.