The Parabolic SAR is the row of dots that sits under the price in an uptrend and jumps above it when the trend breaks. Welles Wilder introduced it in 1978, in the same book as the RSI and the ATR. It is a trailing stop that speeds up: every new high moves the dots closer, faster and faster, until the price touches them and they flip to the other side.
I tested the plain version on Bitcoin since 2014: buy when the dots flip below the price, sell when they flip back above. Wilder’s own settings, nothing tuned. 165 closed trades.
The rules
- Buy when the Parabolic SAR flips below Bitcoin’s price: the day’s high breaks above the SAR, which ends a downtrend and starts an uptrend.
- Sell when it flips back above the price: the day’s low breaks below the SAR.
- Welles Wilder’s standard settings from 1978: acceleration factor 0.02, rising by 0.02 with each new extreme, up to 0.20. Daily highs and lows; the signal is read at the close. Long only; in cash between trades.
Market: Bitcoin in US dollars (BTC-USD), trades every day.
The result
| Parabolic SAR | Buy-and-hold | |
|---|---|---|
| Annual return | 35.05% | 56.90% |
| Total return | 3664% | 22903% |
| Max drawdown | −70.7% | −83.4% |
| Worst fall, from – to | Feb 2021 – Dec 2022 | Dec 2017 – Dec 2018 |
| Time in the market | 53% | 100% |
| Trades | Value |
|---|---|
| Closed trades | 165 |
| Winners | 80 (48.5%) |
| Average winner | +13.65% |
| Average loser | −6.37% |
| Win/loss ratio | 2.14 |
| Profit factor | 2.02 |
| Best / worst trade | +115.2% / −24.6% |
| Average holding time | 14 days |
My read
It trades a lot: about 14 trades a year, and it was in the market 53% of the days. 48% of the trades won, but the average winner made 13.6% against 6.4% for the average loser, so the profit factor was 2.02. 48 of the 85 losing trades were over in less than 10 days: the dots get close fast, and an ordinary Bitcoin swing is enough to touch them.
The result rests on a few big trends. The best trade, bought in Nov 2017, made 115% in 25 days into the 2017 bubble. The worst was bought in Dec 2017, right at the top of that bubble, and lost 24.6% in 7 days. The ten best trades together made more than the whole test did; the other 155 trades lost money as a group.
Over the whole period it made 35.1% a year against 56.9% for holding Bitcoin. Its worst fall, from Feb 2021 to Dec 2022, was 71% against 83% for holding. That is smaller, but it is still a fall most people could not sit through. It also did worse than the plain 20-day breakout on the same coin, on return and on drawdown. All of this is before costs, which matter more at 14 round trips a year.
My read: the SAR’s idea is good, a stop that tightens as the trend gets older, but on Bitcoin it tightens too fast. In 2021 I wrote: “Such parabolic moves like Bitcoin had will have my trailing stop lag behind a lot, I know.” I also wrote that I prefer to stay on a trend as long as possible and give some open profit back when it bends. This test is the other side of that choice: a stop that doesn’t lag gets shaken out by ordinary swings long before the trend ends.
Every trade
165 closed trades, newest first
| Bought | Price | Sold | Price | Result |
|---|---|---|---|---|
| 2026-10-22 | 81,312 | 2026-10-25 | 80,024 | −1.6% |
| 2026-09-19 | 81,234 | 2026-10-08 | 81,676 | +0.5% |
| 2026-09-04 | 79,672 | 2026-09-11 | 77,174 | −3.1% |
| 2026-08-19 | 69,266 | 2026-09-02 | 77,300 | +11.6% |
| 2026-08-06 | 64,262 | 2026-08-14 | 62,976 | −2.0% |
| 2026-07-05 | 63,548 | 2026-07-25 | 64,312 | +1.2% |
| 2026-06-12 | 63,543 | 2026-06-24 | 60,995 | −4.0% |
| 2026-05-27 | 74,345 | 2026-05-28 | 73,537 | −1.1% |
| 2026-04-23 | 78,269 | 2026-05-14 | 81,051 | +3.6% |
| 2026-04-08 | 71,123 | 2026-04-21 | 76,353 | +7.4% |
| 2026-03-05 | 70,841 | 2026-03-23 | 70,915 | +0.1% |
| 2026-02-09 | 70,121 | 2026-02-25 | 67,960 | −3.1% |
| 2026-01-03 | 90,603 | 2026-01-20 | 88,311 | −2.5% |
| 2025-12-04 | 92,142 | 2025-12-16 | 87,844 | −4.7% |
| 2025-11-25 | 87,342 | 2025-12-02 | 91,350 | +4.6% |
| 2025-10-01 | 118,649 | 2025-10-11 | 110,808 | −6.6% |
| 2025-09-03 | 111,723 | 2025-09-23 | 112,015 | +0.3% |
| 2025-08-08 | 116,689 | 2025-08-16 | 117,491 | +0.7% |
| 2025-06-26 | 106,960 | 2025-07-19 | 117,940 | +10.3% |
| 2025-06-09 | 110,294 | 2025-06-21 | 102,257 | −7.3% |
| 2025-05-09 | 102,971 | 2025-05-26 | 109,440 | +6.3% |
| 2025-04-14 | 84,542 | 2025-05-06 | 96,802 | +14.5% |
| 2025-03-21 | 84,043 | 2025-04-07 | 79,235 | −5.7% |
| 2025-03-03 | 86,066 | 2025-03-10 | 78,532 | −8.8% |
| 2025-02-21 | 96,126 | 2025-02-25 | 88,736 | −7.7% |
| 2025-01-17 | 104,462 | 2025-01-28 | 101,332 | −3.0% |
| 2025-01-07 | 96,923 | 2025-01-10 | 94,701 | −2.3% |
| 2024-11-30 | 96,449 | 2024-12-20 | 97,756 | +1.4% |
| 2024-11-07 | 75,905 | 2024-11-26 | 91,985 | +21.2% |
| 2024-10-15 | 67,041 | 2024-11-02 | 69,289 | +3.4% |
| 2024-10-08 | 62,132 | 2024-10-11 | 62,445 | +0.5% |
| 2024-09-14 | 60,005 | 2024-10-01 | 60,837 | +1.4% |
| 2024-08-12 | 59,355 | 2024-09-02 | 59,112 | −0.4% |
| 2024-07-28 | 68,256 | 2024-08-02 | 61,415 | −10.0% |
| 2024-07-15 | 64,870 | 2024-07-26 | 67,912 | +4.7% |
| 2024-07-02 | 62,029 | 2024-07-05 | 56,662 | −8.7% |
| 2024-06-05 | 71,083 | 2024-06-12 | 68,241 | −4.0% |
| 2024-05-05 | 64,031 | 2024-05-24 | 68,526 | +7.0% |
| 2024-04-09 | 69,139 | 2024-04-14 | 65,739 | −4.9% |
| 2024-03-26 | 69,988 | 2024-04-03 | 65,981 | −5.7% |
| 2024-02-27 | 57,085 | 2024-03-16 | 65,315 | +14.4% |
| 2024-01-29 | 43,288 | 2024-02-21 | 51,839 | +19.8% |
| 2024-01-09 | 46,140 | 2024-01-13 | 42,842 | −7.1% |
| 2023-12-21 | 43,869 | 2024-01-04 | 44,180 | +0.7% |
| 2023-11-16 | 36,155 | 2023-12-12 | 41,450 | +14.6% |
| 2023-10-17 | 28,416 | 2023-11-15 | 37,881 | +33.3% |
| 2023-10-02 | 27,531 | 2023-10-12 | 26,757 | −2.8% |
| 2023-09-15 | 26,609 | 2023-09-26 | 26,217 | −1.5% |
| 2023-08-09 | 29,561 | 2023-08-17 | 26,665 | −9.8% |
| 2023-08-03 | 29,179 | 2023-08-08 | 29,765 | +2.0% |
| 2023-06-20 | 28,327 | 2023-07-15 | 30,296 | +6.9% |
| 2023-05-29 | 27,746 | 2023-06-06 | 27,239 | −1.8% |
| 2023-05-24 | 26,335 | 2023-05-26 | 26,719 | +1.5% |
| 2023-04-27 | 29,474 | 2023-05-09 | 27,659 | −6.2% |
| 2023-04-11 | 30,235 | 2023-04-20 | 28,246 | −6.6% |
| 2023-03-14 | 24,746 | 2023-04-04 | 28,168 | +13.8% |
| 2023-02-16 | 23,623 | 2023-03-04 | 22,353 | −5.4% |
| 2023-02-03 | 23,449 | 2023-02-07 | 23,264 | −0.8% |
| 2023-01-12 | 18,870 | 2023-01-31 | 23,139 | +22.6% |
| 2022-12-06 | 17,090 | 2022-12-20 | 16,906 | −1.1% |
| 2022-10-26 | 20,770 | 2022-11-09 | 15,881 | −23.5% |
| 2022-09-28 | 19,427 | 2022-10-12 | 19,157 | −1.4% |
| 2022-09-10 | 21,681 | 2022-09-16 | 19,773 | −8.8% |
| 2022-07-29 | 23,805 | 2022-08-18 | 23,213 | −2.5% |
| 2022-07-19 | 23,389 | 2022-07-27 | 22,931 | −2.0% |
| 2022-07-08 | 21,731 | 2022-07-13 | 20,212 | −7.0% |
| 2022-06-25 | 21,502 | 2022-07-01 | 19,269 | −10.4% |
| 2022-05-16 | 29,863 | 2022-06-08 | 30,214 | +1.2% |
| 2022-04-21 | 40,527 | 2022-04-25 | 40,458 | −0.2% |
| 2022-03-23 | 42,893 | 2022-04-07 | 43,504 | +1.4% |
| 2022-03-01 | 44,355 | 2022-03-08 | 38,737 | −12.7% |
| 2022-02-02 | 36,953 | 2022-02-18 | 40,031 | +8.3% |
| 2022-01-21 | 36,457 | 2022-01-22 | 35,030 | −3.9% |
| 2021-12-24 | 50,822 | 2022-01-04 | 45,898 | −9.7% |
| 2021-11-30 | 57,005 | 2021-12-04 | 49,201 | −13.7% |
| 2021-11-03 | 62,970 | 2021-11-17 | 60,368 | −4.1% |
| 2021-10-02 | 47,711 | 2021-10-23 | 61,394 | +28.7% |
| 2021-09-03 | 50,025 | 2021-09-08 | 46,091 | −7.9% |
| 2021-08-21 | 48,905 | 2021-09-01 | 48,847 | −0.1% |
| 2021-08-07 | 44,556 | 2021-08-18 | 44,801 | +0.6% |
| 2021-07-25 | 35,350 | 2021-08-06 | 42,817 | +21.1% |
| 2021-07-13 | 32,702 | 2021-07-21 | 32,111 | −1.8% |
| 2021-06-15 | 40,406 | 2021-06-22 | 32,506 | −19.6% |
| 2021-05-27 | 38,437 | 2021-06-09 | 37,345 | −2.8% |
| 2021-05-01 | 57,828 | 2021-05-13 | 49,716 | −14.0% |
| 2021-03-30 | 58,918 | 2021-04-19 | 55,724 | −5.4% |
| 2021-03-08 | 52,247 | 2021-03-23 | 54,739 | +4.8% |
| 2021-01-30 | 34,270 | 2021-02-23 | 48,824 | +42.5% |
| 2021-01-07 | 39,371 | 2021-01-12 | 33,923 | −13.8% |
| 2020-12-01 | 18,803 | 2021-01-05 | 33,992 | +80.8% |
| 2020-11-05 | 15,580 | 2020-11-27 | 17,108 | +9.8% |
| 2020-10-10 | 11,296 | 2020-11-03 | 13,950 | +23.5% |
| 2020-09-17 | 10,949 | 2020-10-03 | 10,549 | −3.7% |
| 2020-09-02 | 11,414 | 2020-09-04 | 10,512 | −7.9% |
| 2020-08-15 | 11,866 | 2020-08-23 | 11,665 | −1.7% |
| 2020-07-22 | 9,525 | 2020-08-12 | 11,585 | +21.6% |
| 2020-05-31 | 9,461 | 2020-06-16 | 9,538 | +0.8% |
| 2020-05-15 | 9,328 | 2020-05-25 | 8,907 | −4.5% |
| 2020-04-24 | 7,551 | 2020-05-11 | 8,602 | +13.9% |
| 2020-03-21 | 6,185 | 2020-04-16 | 7,117 | +15.1% |
| 2020-03-06 | 9,123 | 2020-03-09 | 7,924 | −13.1% |
| 2020-01-29 | 9,317 | 2020-02-16 | 9,934 | +6.6% |
| 2020-01-07 | 8,164 | 2020-01-24 | 8,445 | +3.5% |
| 2019-12-20 | 7,219 | 2020-01-03 | 7,345 | +1.7% |
| 2019-11-29 | 7,761 | 2019-12-12 | 7,243 | −6.7% |
| 2019-10-26 | 9,245 | 2019-11-13 | 8,808 | −4.7% |
| 2019-10-09 | 8,596 | 2019-10-17 | 8,104 | −5.7% |
| 2019-09-03 | 10,624 | 2019-09-12 | 10,410 | −2.0% |
| 2019-08-02 | 10,518 | 2019-08-14 | 10,052 | −4.4% |
| 2019-07-10 | 12,157 | 2019-07-15 | 10,895 | −10.4% |
| 2019-06-16 | 8,994 | 2019-07-01 | 10,583 | +17.7% |
| 2019-05-27 | 8,806 | 2019-06-05 | 7,824 | −11.1% |
| 2019-05-04 | 5,831 | 2019-05-18 | 7,271 | +24.7% |
| 2019-04-21 | 5,315 | 2019-04-30 | 5,351 | +0.7% |
| 2019-03-21 | 4,029 | 2019-04-13 | 5,097 | +26.5% |
| 2019-02-09 | 3,671 | 2019-03-05 | 3,896 | +6.1% |
| 2018-12-20 | 4,134 | 2018-12-29 | 3,820 | −7.6% |
| 2018-11-30 | 4,017 | 2018-12-07 | 3,420 | −14.9% |
| 2018-10-16 | 6,596 | 2018-10-30 | 6,334 | −4.0% |
| 2018-09-22 | 6,722 | 2018-10-12 | 6,275 | −6.7% |
| 2018-08-16 | 6,335 | 2018-09-06 | 6,529 | +3.1% |
| 2018-07-18 | 7,371 | 2018-08-02 | 7,567 | +2.7% |
| 2018-07-01 | 6,386 | 2018-07-13 | 6,238 | −2.3% |
| 2018-06-01 | 7,541 | 2018-06-11 | 6,907 | −8.4% |
| 2018-05-04 | 9,701 | 2018-05-10 | 9,044 | −6.8% |
| 2018-04-13 | 7,896 | 2018-05-02 | 9,236 | +17.0% |
| 2018-04-04 | 6,854 | 2018-04-07 | 6,911 | +0.8% |
| 2018-03-04 | 11,513 | 2018-03-09 | 9,338 | −18.9% |
| 2018-02-11 | 8,130 | 2018-02-25 | 9,665 | +18.9% |
| 2017-12-16 | 19,497 | 2017-12-23 | 14,699 | −24.6% |
| 2017-11-16 | 7,872 | 2017-12-11 | 16,937 | +115.2% |
| 2017-10-21 | 6,032 | 2017-11-11 | 6,358 | +5.4% |
| 2017-09-19 | 3,925 | 2017-10-19 | 5,709 | +45.4% |
| 2017-08-26 | 4,352 | 2017-09-05 | 4,377 | +0.6% |
| 2017-07-21 | 2,668 | 2017-08-20 | 4,088 | +53.2% |
| 2017-07-05 | 2,602 | 2017-07-12 | 2,399 | −7.8% |
| 2017-06-04 | 2,512 | 2017-06-15 | 2,465 | −1.9% |
| 2017-05-18 | 1,889 | 2017-05-27 | 2,039 | +8.0% |
| 2017-04-03 | 1,144 | 2017-05-14 | 1,809 | +58.1% |
| 2017-03-11 | 1,176 | 2017-03-19 | 1,037 | −11.8% |
| 2017-02-19 | 1,048 | 2017-03-08 | 1,150 | +9.7% |
| 2017-01-22 | 925 | 2017-02-10 | 989 | +6.9% |
| 2016-11-17 | 741 | 2017-01-06 | 902 | +21.8% |
| 2016-10-08 | 619 | 2016-11-04 | 703 | +13.6% |
| 2016-08-11 | 589 | 2016-09-22 | 596 | +1.2% |
| 2016-07-02 | 704 | 2016-07-23 | 656 | −6.8% |
| 2016-05-28 | 530 | 2016-06-22 | 596 | +12.5% |
| 2016-05-07 | 459 | 2016-05-20 | 443 | −3.5% |
| 2016-03-18 | 410 | 2016-04-28 | 449 | +9.6% |
| 2016-02-14 | 407 | 2016-03-03 | 422 | +3.5% |
| 2016-01-08 | 453 | 2016-01-16 | 388 | −14.5% |
| 2015-11-30 | 377 | 2015-12-21 | 439 | +16.3% |
| 2015-10-06 | 246 | 2015-11-07 | 386 | +57.1% |
| 2015-09-16 | 229 | 2015-09-17 | 230 | +0.3% |
| 2015-08-27 | 225 | 2015-09-15 | 230 | +2.5% |
| 2015-06-30 | 263 | 2015-07-17 | 279 | +6.2% |
| 2015-06-13 | 232 | 2015-06-25 | 243 | +4.5% |
| 2015-05-01 | 232 | 2015-05-19 | 232 | −0.1% |
| 2015-04-23 | 236 | 2015-04-27 | 229 | −3.0% |
| 2015-04-06 | 255 | 2015-04-10 | 236 | −7.6% |
| 2015-02-28 | 254 | 2015-03-19 | 261 | +2.6% |
| 2015-01-23 | 233 | 2015-02-01 | 227 | −2.5% |
| 2014-12-23 | 335 | 2014-12-31 | 320 | −4.3% |
| 2014-11-10 | 367 | 2014-11-19 | 381 | +3.7% |
| 2014-10-10 | 362 | 2014-10-26 | 355 | −1.9% |
How it was tested
- Signals are read on the daily close; each trade happens at the next day’s close. No look-ahead.
- Long only, fully in or fully out. No commissions, slippage, interest or dividends.
- The test starts on the first day every indicator has a value (Oct 7, 2014); buy-and-hold covers the same days.
- Prices: Yahoo Finance daily data (BTC-USD), snapshot
btc-2026-11-04.csv. Checked by a second, independent program before publishing.
Not financial advice. This is educational content, shared for information and entertainment only, and it is not a recommendation to buy or sell any asset. Backtests and past results do not guarantee future results, and the numbers or charts here may contain mistakes. Trading carries risk, including losing all the money you put in. Do your own research before you make any decision.