The Supertrend indicator was originally created by a french fellow named Olivier Seban, and its goal is to identify the Primary Trend of prices. Its calculation is easy and based on the average of Highs and Lows and then we add the volatility of a custom period, plus a multiplier. This way we get the Supertrend Line.
You can find in the web several approaches and trading strategies using this very useful indicator.
HOW TO “READ” THIS INDICATOR
- If the closing prices are above Supertrend Line, there is a Bullish sentiment at that moment. The opposite is a Bearish sentiment.
- Some traders use the Supertrend Line as a Stop Loss boundary.
- It is a lagging indicator, so sue Price Action and other tools to prepare your strategy accordingly.
PARAMETERS
- Period of analysis (# of bars)
- Multiplier
- Indicator new Internal Name – Useful to fast recalibrate several instances of this indicator in realtime through Minions Labs Recalibrator.
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