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Trend following
Why does Parabolic SAR flip back and forth in a chop?
Parabolic SAR
What it bets
In a trend, the stop should tighten forward with the extreme until price hits it.
How the rule is written
Welles Wilder's dots. Hold long while a dot is under price, and short while a dot is above it. When price touches a dot, reverse, and the dot jumps to the other side. The acceleration factor makes the dots tighten faster once the trend has extended.
When it fails
With no trend, dots get hit quickly. Direction flips back and forth, and each leg loses a little.
Do not confuse it with
A chandelier exit usually only gets the trade out. It does not reverse the moment it is hit. SAR writes the stop and the reverse as the same flip.