This Stop and Reverse indicator (SAR) has been created by Welles Wilder. You can find many versions and variations of it (also the more famous 3 bar stop used by Larry Williams is based on this indicator) but this is the original coding of it.

I backtested this code and it also provide some SMALL but consistent income (unlike for example the 3 bar stop).

Rules are simple: when the price is above the SAR you remain long, when crosses below you close your long position (and you can short if you want).

Blue skies!!

//period=7
//coeff=3

mioATR=AverageTrueRange[period](close)
arc=coeff*mioATR[1]

once ref=open
if barindex=8 then
 if close>=close[1] then
  ref=close
  mioSAR=close-arc
 elsif close<close[1] then
  ref=close
  mioSAR=close+arc
 endif
 inv=barindex[1]
endif

if barindex>8 then
 if close crosses under mioSAR then
  mioSAR=close+arc
  inv=barindex
 endif
 if close crosses over mioSAR then
  mioSAR=close-arc
  inv=barindex
 endif


 if close>=mioSAR and (barindex-inv)>0 then
  ref=highest[barindex-inv](close[1])
  mioSAR=ref-arc
 endif
 if close<mioSAR and (barindex-inv)>0 then
  ref=lowest[barindex-inv](close[1])
  mioSAR=ref+arc
 endif


 endif

if close>mioSAR then
 red=210
 blu=0
else
 red=0
 blu=250
endif


return mioSAR coloured (red,0,blu) as "Wilder's ARC stop"