Supertrend Indicator and its use for Intraday trading


A ‘Supertrend’ indicator is a tool that can provide investors with accurate buy or sell indications in an inclined marketplace. While the name implies, the Supertrend indicator is a trend-tracking indicator similar to moving averages and moving average convergence divergence (MACD). A supertrend indicator is devised on rates, and its position specifies the existing trend.

Supertrend indicator: A top choice for intraday traders

Nowadays, intraday traders are using the super trend indicator to putting the best bet. A supertrend indicator is simple to read. It will switch colors depending on whether or not the trader should buy. If the indicator shifts under the closing price, the color of it will become green, indicating an entrance or entrance to purchase. When a supertrend closes higher, the supertrend indicator demonstrates a sell indication in red.

3 Supertrend strategy: What is it all about?

Intraday traders frequently consider the 3 supertrend strategies to boost their gains. The three supertrend strategy depends on three separate supertrend lines, and they are:

  • Supertrend 1 – Fixed to Average True Range @10 and multiplier @1
  • Supertrend 2 – Fixed to Average True Range @11 and multiplier @2
  • Supertrend 3 – Fixed to Average True Range @12 and multiplier @3

Like the super trend 1-minute strategy, the 3 super trend strategy asks for a substantiated trend higher or lower than the 200 Exponential Moving Average (EMA). Besides, the investors are advised to utilize the Relative Strength Index (RSI) for evaluating over-purchased and oversold spots.

As soon as you have accomplished this component, how to fix your three supertrend strategies isgiven below:

  • Long position – if the price is higher than the 200 EMA (Exponential Moving Average), 2/3 supertrends have a green color, and the Relative Strength Index is under 40.
  • Short position – if the price is under the 200 EMA, 2/3 supertrends have red color, and the Relative Strength Index is higher than 60.

The stop loss should be placed at the median supertrend line.

Supertrend indicator best settings                                  

Supertrend functions more effectively in a daily timeframe. Usually, the 15-minute time frame works best for intraday traders. However, traders should remember that the super trend indicator must not be the sole indicator for them to implement. They should use it with other indicators such as moving average, Relative Strength Index, and price action indicator.   

What is the best supertrend setting for bank nifty?

The best supertrend setting for bank nifty is thatonce you open the chart, enter supertrend and fix the settings at 10 and 3. Besides, the traders have the choice to input their personalized settings. Nonetheless, when someone is utilizing this supertrend indicator, he shouldn’t keep away from positioning his stop loss. The intraday trader can place his stop loss straight at the green signal line in a long position. 

What are the best supertrend settings for positional trading?

Thebest supertrend indicator settings for swing trading or best supertrend settings for positional trading aretypicallythe one-day and four-hour charts, coupled with the default 10, 3 supertrend indicator line.

If you want to enrich your knowledge further on the supertrend indicator, there is a book on Goodreads titled the supertrend indicator: the definitive guide. Besides, the book will help youlearnabout a few useful trading strategies based wholly on this indicator.The in-depth technical analysis elaborated in the book will help you determine buying and selling prospects based on multipliers and periods. 

About Author