Parabolic SAR (stop and reverse) is a method to find trends in market prices or securities. It may be used as a trailing stop loss based on prices tending to stay within a parabolic curve during a strong trend. The concept draws on the idea that time is an enemy, and unless a security can continue to generate more profits over time, it should be liquidated. The indicator generally works well in trending markets, but provides "whipsaws" during non-trending, sideways phases.
A parabola below the price is generally bullish, while a parabola above is generally bearish.