Supertrend Indicator: Generates Clear and Simple Trend Trading Signals
The Supertrend indicator essentially determines trend direction, and consists of a single line plotted over prices. The market is bullish when the Supertrend is plotted below prices, and bearish when it is above prices. The indicator flips above/below prices whenever a change in trend is detected. Supertrend Indicator Calculations. Supertrend Indicator Explained // Here are the free reports: Report on how to capitalize on the current extreme imbalance between gold and silver prices: htt. Supertrend is the trend following indicator. It’s used to tell you the trend of the share. Supertrend line is plotted on the candlesticks of the share price. The green line indicates a bullish trend and the red line indicate the bearish trend.
As the name suggests, the Supertrend indicator, like moving averages and MACD, is an indicator for trend tracking. Supertrend indicator is determined by price, and its values determine the current trend.
It is easy to use and gives an accurate idea of the current trend. This tool can be used on futures, Forex, and stocks.
It should also be noted that this Forex indicator can determine support and resistance levels.
Supertrend indicator is a very good tool for studying current market trends. It clearly describes the difference between downtrend and uptrend.
This triple supertrend indicator uses three different supertrend indicators with different and adjustable parameters. It is useful to filter false signals, set stop losses and detect sideways markets. When two or three (depending on the trading environment) supertrend lines turn green, a long is more suitable for a long position and vice versa.
Indicator calculationsThe formula for calculating Supertrend is as follows:
- SuperTrend Superior = (higher + lower) / 2 + m * ATR (n)
- SuperTrend Lower = (higher + lower) / 2 - m * ATR (n)
Where:
- n is the number of ATR billing periods.
- m is the volatility factor measured by ATR.
Supertrend Indicator Mt4
Thus, ATR occupies a key place in the Supertrend indicator formula. Indicator setting
Supertrend is built on the basis of two parameters. The default values used for the Supertrend indicator are 10 for the Number_of_Periods parameter and 3 for the Multiplier parameter.
Supertrend indicator parameters are usually adjusted depending on the volatility of the asset being traded. If the asset is more volatile, you can increase the default values, and if the asset is not volatile, you can decrease the default values.
You can reduce the multiplier parameter if you need the Supertrend indicator to respond faster to price changes, but in this case, it can create quite a lot of false signals. Typically, the default settings are better than other values.
The Supertrend curve is superimposed on the price chart, and when the indicator falls below the closing price, it generates a buy signal, then the indicator color turns green. This also suggests that the trend is changing from downward to upward.
Conversely, when Supertrend closes above the price, it generates a sell signal, then the indicator color turns red. This suggests that the trend is changing from bullish to bearish.
The Supertrend indicator, in particular, acts as a level of support or resistance. After a buy signal, any decline in the indicator curve can also be interpreted as a buy signal, and vice versa.
Supertrend gives traders clear and easy to read signals. This trading tool can be used on stocks, futures, or currencies, as well as on daily, weekly, and hourly charts.
It works much better in a trending market but can give false signals when the market moves sideways. We recommend using this indicator in conjunction with other tools when building your trading strategies to more accurately identify trends.
You can find some of the trading strategies based on the Supertrend indicator on our website in the Strategies section.
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What is Supertrend Indicator?
Are you an intraday trader? – Of course yes that’s why you are here. it’s probable that you utilize technical indicator for spotting transactions by using different indexes. A’Supertrend‘ indicator is just one, which may provide you exact buy or sell signal in a trending market.
As its name implies,’Supertrend’ is a trend-following index. Is very easy to use? – Answer is its very very easy to use. It’s plotted on Price and their positioning indicates the present trend.
Its indicate combinations of momentum and price action ( volatility ). SuperTrend indicator is created by Olivier Seben. Its works perfectly all momentum indices and instruments.
The index is simple to use and provides a precise reading about a continuous trend. It’s assembled using two parameters, namely multiplier and period. The default values used while building a superindicator are 10 for average true range ( ATR ) or trading interval and three because of the own multiplier.
“The average true range (ATR) plays a significant part in’Supertrend’ since the index utilizes ATR to figure its value. Starts plotting either in addition to the final cost or below the final price. A buy signal is generated if the’Supertrend’ closes over the purchase price and a sell signal is generated if it closes below the final price.
How Supertrend Indicator Works?
ATR – calculate value of price volatility. Its indicate current market trend.Its quite similar of other trending market indicators like moving average, swing indicator etc etc. Just follow and ride on current market trend because trend is best friend of traders.
Mathematical Formula of Super Trend
BASIC UPPERBAND = (HIGH + LOW) / 2 + Multiplier * ATR
BASIC LOWERBAND = (HIGH + LOW) / 2 – Multiplier * ATR
FINAL UPPERBAND = IF( (Current BASICUPPERBAND < Previous FINAL UPPERBAND) and (Previous Close > Previous FINAL UPPERBAND)) THEN (Current BASIC UPPERBAND) ELSE Previous FINALUPPERBAND)
FINAL LOWERBAND = IF( (Current BASIC LOWERBAND > Previous FINAL LOWERBAND) and (Previous Close < Previous FINAL LOWERBAND)) THEN (Current BASIC LOWERBAND) ELSE Previous FINAL LOWERBAND)
SUPERTREND = IF(Current Close <= Current FINAL UPPERBAND ) THEN Current FINAL UPPERBAND ELSE Current FINAL LOWERBAND
Quicker and easier is today’s mantra and That’s What supertrend Being a intraday trader, it’s hard to remain aloof from using indexes. When there are many indicators offered for rapid technical evaluation of the transactions, here we’ll talk about the supertrend index. If you’re already using different signs, it’s fairly straightforward to follow this one.
Also Read: How to Use ADX Indicator for Day Trading?
Different time frames. It functions for stocks, forex, and stocks. It’s employed in a quarter hour, hourly, weekly, and daily graphs. Depending on the parameters of multiplier and interval, the index uses 3 to multiplier and 10 for ATR as default values. Average True Range is represented with the amount of times while the multiplier is the value where the scope is slowed.
Open a Chart of instrument you want to apply SuperTrend indicator – Set time frame 1 min , 5 min , 10 min or 15 min for intraday trading or if you want to trade positional then 30 min or 1 hr is best time frame for you.
Supertrend Indicator Formula
Apply indicator on it and set parameter ( Default parameters is 10 and 3 ) as per instruments volatility. Once indicator plotted you will find below screen type chart on your screen. Super Trend indicator is always in trade indicator means trade and reverse. But I suggest always keep stoploss as per your money management strategy.
Download Amibroker AFL – SuperTrend Indicator
( Open txt file Copy code – Open Amibroker Formula Editor , paste code there and save )
You can also use Kite – SuperTrend indicator
Streak ( coding without Algo ) By ZerodhaSuperTrend Indicator Formula find here.
Pro of Supertrend Indicator
- Trend indicator
- Accurate Signal on Trending chart.
- Implemented on various time frame.
- Its Free – no copyright by Developer.
- Extremely Easy to use on different charting tool.
Cons of Supertrend Indicator
- Only works on trending market.
- Side wise market gives number of false call.
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