This indicator is a modified Parabolic SAR (Stop And Reverse) created by Dennis Meyers in 2001 in order to avoid the typical whipsaws produced in ranging, non-trending markets. Parabxot does not reverse unless the price penetrates the previous SAR level by a specified amount. Also it increases (decreases) the initial distance of the SAR level by adding (substracting) a predefined percentage amount to the Parabolic starting value.
The thresholds can be adjusted using the following parameters:
xo controls the percentage amount added or substracted to the last Parabolic SAR value in order to allow a change in direction in the indicator.
xpr defines how much should be added to the previous highest high (in case of a bearish reversal) or substracted to the previous lowest low (in case of a bullish reversal), expressed as a percentage of price.
Setting xo and/or xpr to zero disables the filters and the indicator behaves as the original Parabolic SAR.
Reference Meyers, Dennis (2001), The Improved Parabolic + Noise Filter System
@ballofpaper, using xo=0.10 and xpr=0.05 you get that chart. Of course, those are values a little bit high but it's intended to show an extreme case. Of course, it's okay to play with different values.