Super trend is simple and easy to use indicator and gives a precise reading about an ongoing trend.
It is built with two parameters, namely period and multiplier.
The Buy and Sell signal modifies once the indicator tosses over the closing price. When the Super trend closes above the Price, a Buy signal is generated, and when the Super trend closes below the Price, a Sell signal is generated.
The illustration chart below depicts how Super trend Indicator look like on a price chart.
A ‘Supertrend’ indicator can be used on equities, futures or forex, and also on daily, weekly and hourly charts as well but normally, it is unsuccessful in a sideways-moving market.
Like any other indicator, ‘Supertrend’ works best when used with other indicators such as MACD, Parabolic SAR, RSI, etc.
A ‘Supertrend’ also acts as a strong support or resistance and it also provides a trailing stop loss for the existing trade.
Prior to the super trend indicator, knowledge of the ATR is necessary as super trend employs ATR values to calculate the indicator values.
The supertrend indicator is plotted over the price chart of the stock or the index. The indicator is a continuous line which changes its color between green and red based on the price moment in the underlying.
An important thing which has to be understood here is, Super trend does not predict the direction, rather once the direction is recognized it will direct you to initiate a position and recommends you to stay in the position till the trend maintains.
For more information about supertrend https://enrichbroking.in/super-trend
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