. . .more on Formulas 

If Long...

SAR = (HI.1 - SAR.1) x AF + SAR.1

Wilder's acceleration factor (AF) is 0.02 for the initial calculation. Thereafter the AF is increased 0.02 every period there is a New High made. If a new high is not made then the AF is not increased from the last SAR. This continues until the AF reaches 0.2. Once the AF reaches 0.2 it stays at that value for all future SAR calculations until the trade is stopped out.

If Short...

SAR = (LO.1 - SAR.1) x AF - SAR.1

The AF is initially 0.02 and changes by 0.02 intervals until it is 0.2 but the change in the AF is made only after each New Low of a period is made. The AF is never increased above 0.2.

Rules of Advancement...
The SAR is never advanced into the previous period's range or the current period's range.

If Long using daily data: Never move tomorrows applicable SAR above yesterdays or today's low. If the calculated SAR is higher than either of these lows then use the lower low of these two days as the SAR and use this value for SAR calculation for the next day.

If Short using daily data: Never move the SAR below the high of yesterday or today. If the calculated SAR is lower than either of these values then use the higher high of these as the SAR for the day and for the future calculation for the following day's SAR.

. . . more on Charts 

Above is a 15-Minute Candlestick Chart of Microsoft Corporation (MSFT) .  The red dots overlaying the candles represents the Parabolic SAR levels using the preferences below.  The green up arrows represent bullish SAR reversals, while the red down arrows represent bearish SAR reversals (both Scan Markers).  In the lower pane, the SAR is drawn as an oscillator.

. . . more on Preferences 

• Initial/Incremental Step - The values used for initializing and stepping the acceleration factor (AF).

• Maximum Step - The maximum value that can be used for the acceleration factor (AF).

• Use Highs and Lows - If this checkbox is checked, the high and low values will be used in the computation of the SAR, otherwise, only the open and closing values will be considered.

• SAR Color - Color and style of the SAR line/oscillator in the chart.

• SAR Oscillator (CL - SAR) - This option results in a histogram style oscillator representing the difference between the closing price and the SAR value. 

Parabolic SAR is plotted around the price chart similar to a  moving average. The basics behind the formula for computing the SAR values can be found above.

The Parabolic SAR provides excellent exit points. You should close long positions when the price falls below the SAR and close short positions when the price rises above the SAR.

If you are long (i.e., the price is above the SAR), the SAR will move up every day, regardless of the direction the price is moving. The amount the SAR moves up depends on the amount that prices move.

Wilder suggests using this indicator in a trending (or directional) market. If the security is trending up, then one might only take long positions. If the security is trending down, one might only take short positions.

SAR Oscillator
A new checkbox labeled "SAR Oscillator (CL - SAR)" has been added to the Parabolic SAR Indicator preferences.  When this option is checked, the oscillator will be drawn as a histogram that oscillates about 0.  The oscillator represents the difference between the closing price and the SAR indicator value. SAR rules would dictate entering into a long position when the oscillator crosses above 0, and reversing into a short position when the oscillator crosses below 0. 
 

SAR < CL AND SAR.1 >= CL.1

And to reverse the long position and go short when the SAR crosses back above the closing price...

SAR > CL AND SAR.1 <= CL.1