How to Use Supertrend Indicator in TradingView: Settings & Strategy
How to Use Supertrend Indicator in TradingView: Settings & Strategy
In TradingView you can find an unlimited number of tools and indicators that you can use for technical analysis. From originally developed technical indicators to customized community-based useful indicators, you can pick the best tool that suits your trading strategy. All types of indicators have their own applications and utility as per market conditions.
Supertrend Indicator is one of them that you can use in your intraday as well as short-term trading strategy. However, there are already various indicators you can add in TradingView like RSI,MACD, Fibonacci Retracement,Volume Indicators etc. you can use to analyse the market or stock trend to enter into trade. But as the name suggests a Supertrend indicator can be very useful and best of all you can use it individually or in combination with others.
Yes, today we are going to talk about this Supertrend indicator that comes with unlimited features in TradingView. It is a trend-following indicator based on the Average True Range that you can use to identify changes in trend direction and to position stops. So, let’s talk about this super indicator in more detail and how you can use this in TradingView for trading.
The Supertrend is a trend-following indicator that overlaps on the main chart structure in TradingView like candlestick chart patterns and the plots created by this Supertrend indicator show the current trend in the stock price or market index movement.
You can also use the Supertrend indicator with different time periods like intraday, daily or weekly etc. and on the different types of underlying assets. You can apply this for different ranges from the last three hours to the previous three months.
The Supertrend indicator combines many periods, into one that helps to know whether the trend likely to continue further or not. And when two or more time frames overlap, it indicates that the trend is likely to further continue in future. However, the calculation of a single line in the Supertrend indicator combines trend detection and volatility.
Adding the Supertrend indicator in TradingView is very simple a few steps away you can add this to the TradingView chart. From the indicator section in TradingView, you can apply the Supertrend. For the stepwise guidance follow the steps given below.
However, the Supertrend has various inputs that you adjust as per your trading strategy. And when you adjust these settings the Supertrend indicator becomes more sensitive to price changes. Though the ideal settings for the Supertrend indicator are 10 and 3 for periods and multiplier, respectively, for the Supertrend inputs, you can adjust atrLength and multiplier as per the recommended settings given below.
The atrLength setting is the lookback length for the ATR calculation;
Multiplier is the ATR that is multiplied by to offset the bands from price.
You can adjust or change the settings in the Supertrend but keep in mind when you do that, the indicator will respond more to price changes with smaller settings that can give more signals. While higher settings, will reduce the market noise but can give you only limited trade signals.
For intraday trading, you can use the 1-minute scalping or you can also use the 5-minute chart as another useful timeframe to consider while adjusting the Supertrend indicator settings for intraday trading. However, for the best supertrend settings for day trading, you can keep the values of (10,3). To avoid getting ant false signal you can use the combination of Supertrend with other indicators like Bollinger Band or Moving Averages to confirm the trend.
For positional trading, you can use the Supertrend indicator with a longer time frame that will help you perceive the right trade signals and outperform the short-term volatility in the stock price movement you are looking to create the long-term position.
Though, the best Supertrend settings for positional trading you can use the 1-day and 4-hour chart along with the default parameter of 10, 3 in ATR length and Factor. For longer periods you can also set 30, 9 parameters for the positional trading. Though the parameters and settings for the Supertrend can be different as per the trading strategy using the Supertrend indicator with the right interpretation is more important to get the right signal for trade.
You can not only use the Supertrend indicator to know the trend in the price movement, but you can also use it to get the signal for creating the long or short positions in the underlying assets. As per the expert’s view, when the price goes below the indicator curve, the line becomes red and indicates there I downtrend running in the underlying asset.
While, on the other hand, when the price goes above the curve, the indicator becomes green, giving the signal of uptrend. However, after every closing below or above the Supertrend, a new trend is visible in the price movement of an underlying stock or market index.
And based on these changes in the Supertrend line you can create the long or short positions. When the Supertrend line goes below the closing price and turns green a buy signal is generated, conversably when the Supertrend line closes above the closing price and becomes red, you can go for short-selling or create the sell position in the stock for trading.
Apart from intraday trading or positional trading, many traders use this Supertrend for swing trading. While using the Supertrend for swing trading you need to consider two things in your mind: period length and multiplier values.