A Super Trend is a trend following indicator similar to moving averages. It is plotted on price and the current trend can simply be determined by its placement vis-a-vis price. It is a very simple indicator and is constructed with the help of just two parameters- period and multiplier.
When we construct the Supertrend indicator strategy, the default parameters are 10 for Average True Range (ATR) and 3 for its multiplier. The average true range (ATR) plays a key role in ‘Supertrend’ as the indicator uses ATR to compute its value and it signals the degree of price volatility.
-How to identify buy and sell signal using supertrend indicators?
Super Trend being a trending indicator works beautifully in trending markets (both uptrends and downtrends). The buy-sell signal can easily be identified when the indicator flips over the closing price. A buy signal is generated when the Super Trend closes below the price and the color changes to green. On the other hand, a sell signal is made when the Super Trend closes above the price and the color of Super Trend turns red.
There’s no technical indicator which can be 100% accurate and so is Super Trend also. It also generates false signals in the sideways market, though it gives lesser false signals as compared to other indicators. So you can combine Super Trend with other indicators to get better trading signals.
Best Timeframe to Use in Supertrend Indicator
As for swing traders and position holders, they can use longer timeframes.
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This indicator can also be used on multiple timeframes where you place it on a larger timeframe then go down to a lower timeframe and use it for entry and exit signals.
The lowest timeframe you should use is the 15-minute chart.
Note;
However, Super Trend needs to be used in conjunction with other indicators like RSI, Parabolic SAR, MACD, etc to receive filtered signals.
Moreover, Supertrend also works as a trailing stop-loss for the existing trades and acts as strong support or resistance.
When we construct the Supertrend indicator strategy, the default parameters are 10 for Average True Range (ATR) and 3 for its multiplier. The average true range (ATR) plays a key role in ‘Supertrend’ as the indicator uses ATR to compute its value and it signals the degree of price volatility.
-How to identify buy and sell signal using supertrend indicators?
Super Trend being a trending indicator works beautifully in trending markets (both uptrends and downtrends). The buy-sell signal can easily be identified when the indicator flips over the closing price. A buy signal is generated when the Super Trend closes below the price and the color changes to green. On the other hand, a sell signal is made when the Super Trend closes above the price and the color of Super Trend turns red.
There’s no technical indicator which can be 100% accurate and so is Super Trend also. It also generates false signals in the sideways market, though it gives lesser false signals as compared to other indicators. So you can combine Super Trend with other indicators to get better trading signals.
Best Timeframe to Use in Supertrend Indicator
As for swing traders and position holders, they can use longer timeframes.
-
This indicator can also be used on multiple timeframes where you place it on a larger timeframe then go down to a lower timeframe and use it for entry and exit signals.
The lowest timeframe you should use is the 15-minute chart.
Note;
However, Super Trend needs to be used in conjunction with other indicators like RSI, Parabolic SAR, MACD, etc to receive filtered signals.
Moreover, Supertrend also works as a trailing stop-loss for the existing trades and acts as strong support or resistance.