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® “Home-Study Course” Study Manual Page 200

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A great “SAR” pattern is the ART® “One-Bar Reversal”. For example,
you are long stock “XYZ” or futures contract “X” and the market has

been trending in your favor nicely. Then all of a sudden an ART®
“One-Bar Reversal” develops.

You have two options, either exit the long trade if prices fall one tick
below the ART® “One-Bar Reversal” bar. Or do a “SAR” and exit all
long positions one tick under the ART® “One-Bar Reversal” and also
go immediately short. The new initial stop loss for the short position is
now one tick above the ART® “One-Bar Reversal” bar. Other “SARs”
can be taken off a two bar reversal pattern.

You will make money if the correction is strong enough to cause a
significant pullback. Of course, the uptrend may be so strong that the
new buyers come in immediately after a slight correction and drive
prices upward. That is the risk!

The art in “SAR” trading is to be sure the Volume is high enough to
warrant the trade. High volume indicates that other traders are taking
profits too and the reversal bar indicates more selling than buying. This
creates a potential top in the uptrend. The opposite is true for the
reverse scenario of a down trend and trading the correction to the
upside using a “SAR”.

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