Parabolic SAR is a technical indicator used in Forex trading to determine the direction of a trend and potential reversal points. When the dots are below the price, it suggests an uptrend, while dots above the price suggest a downtrend. A change in the position of the dots can indicate a potential reversal. Traders can use this information to make informed trading decisions and develop strategies for entry and exit points. However, it's important to use this indicator in conjunction with other technical indicators and fundamental analysis for a comprehensive view of the market.