Acceleration Factor (AF)

What is Acceleration Factor (AF)?

Acceleration Factor AF is the sensitivity setting inside the Parabolic SAR indicator that decides how quickly the SAR value moves toward price. It ramps up as a trend proves itself, then eases when nothing new happens. Think of it like a car’s gas pedal for trend following press harder when the move is strong, coast when it is not.

How Acceleration Factor (AF) works

AF lives inside the Parabolic SAR (Stop and Reverse). When price makes new extremes in a trend, AF steps up. No new extremes, AF stays put. Quick walkthrough with a crypto vibe:

1. Step 1: You start a trend, say BTC turns up after a clear low. AF begins at a small value, often 0.02.
2. Step 2: Price prints a higher high, the extreme point updates, and AF increases by its step, typically 0.02. Think of it as the indicator saying, this trend looks real.
3. Step 3: With a larger AF, the SAR value moves closer to price. That tightens risk if you are trailing.
4. Step 4: If price keeps setting new highs, AF keeps stepping up until it hits a max, often 0.2. No new highs, no change.
5. Step 5: Once the trend flips, AF resets and the game restarts the other way.

That is the idea.

Why Acceleration Factor (AF) Matters

AF is the throttle on how reactive PSAR becomes. You care because it translates to real entries, exits, and sanity during volatile sessions.

• Benefit: Tighter trailing when trends are strong, looser when they cool, so you can protect profit without smothering a move.
• Perspective: AF can help you spot potential reversals faster, but crank it too high and you will get shaken out.
• Relevance: Traders use it on majors and alts, in spot or perp charts, anywhere they run PSAR for structure and exits.

Key Characteristics of Acceleration Factor (AF)

What makes AF stand out inside PSAR:

• Adaptive: AF rises only when new trend extremes appear, so it reacts to momentum.
• Bounded: AF has a start, step, and max, which caps sensitivity and keeps things sane.
• Resetting: When trend flips, AF resets to its base value and starts the climb again.
• Risk: A higher AF catches turns quicker but can create more false flips in chop.

How is Acceleration Factor (AF) calculated?

In PSAR, AF starts small, increases when price prints a new extreme point, and stops increasing at a max. Then it plugs into the SAR update.

AF_start = 0.02
AF_step = 0.02
AF_max = 0.20

On new extreme point: AF = min(AF + AF_step, AF_max)
Otherwise: AF = AF

The SAR update that uses AF is:

SAR_next = SAR_current + AF × (EP - SAR_current)

EP is the extreme point in the current trend, the highest high in an uptrend or the lowest low in a downtrend.

Variations

Different traders tweak AF to match their style:

• Step: Smaller step reduces noise, larger step hunts for quicker turns.
• Max: Tighter max hugs price, looser max gives trends more breathing room.
• Asset: Some keep one AF set for BTC and another for thin alts due to liquidity and spread quirks.

Example

ETH breaks to a new weekly high, AF steps up from 0.06 to 0.08, the SAR tightens under price, and your trail moves up to lock in more of the move.

Fun Fact

AF comes from J. Welles Wilder’s PSAR, the same mind behind RSI and ATR. The original suggested step and max values still show up in modern chart defaults decades later.

Wrap-Up

In one line: Acceleration Factor AF is the PSAR sensitivity dial that tells your trailing stop when to hurry and when to chill.