There is an array of tools being developed on a daily basis and it’s imperative that you stay up to date on the ones that concern you.
For intraday traders, there is always a degree of risk when buying or selling assets. However, taking well-informed risks is what makes all the difference.
Keeping up with all the factors and events that affect the stock market, however, is a tough row to hoe. To be successful as an intraday trader, you need to make use of all the tools at your disposal.
These include mathematical calculations like moving averages, Fibonacci retracement, Bollinger bands, and so on.
When it comes to intraday trading, the SuperTrend Indicator is one of the most useful tools at your disposal and can help you step up your game.
Not only does it help you follow market trends, but it also provides buy and sell signals to help you maximize your profit.
If you are an intraday trader and is looking for the perfect tool to help you level up your game, the SuperTrend Indicator is one of the best options available.
Read on to find out more about the SuperTrend Indicator and how simple it is to use.
What Is the SuperTrend Indicator?
The SuperTrend Indicator is an overlay on your trading chart that helps you follow the direction of current trends. It is a very powerful yet often underutilized utility.
The trend indicator plots the price of the asset against time and through some basic computation provides a trend of the price of the asset. The chart is based on two parameters: the average true range and a multiplier.
The SuperTrend Indicator is similar to a moving average indicator and provides buy and sell signals. The data provided from this simple chart can help simplify your trading decisions.
In fact, it is the simplicity of the tool that makes it extremely popular amongst intraday traders and ideal for beginners. One thing that must be kept in mind is that the SuperTrend Indicator cannot predict trends.
It is a lagging indicator and depends on the current price action to provide signals. As such, it cannot predict the future trend of the price of the asset. What it does show is the current trend of the prices.
How Easy is it to Use the SuperTrend Indicator?
The SuperTrend Indicator is amongst the easiest indicators to understand, use and follow. It is perfect for those who are new to the world of technical analysis, who get confused while dealing with concepts like price action theory and who have trouble reading charts like candlestick charts.
Since it is based on only two parameters, it is easy to tweak to get the best possible results. The default values of the average true range and multiplier are set to 10 and 3, respectively.
There are no perfect values for these parameters and changing them alters the behaviour of the SuperTrend Indicator.
The trading pros at https://www.netpicks.com/supertrend-indicator/ indicate that any changes to the SuperTrend Indicator should be backtested before using any real money.
Reading the SuperTrend Indicator is also quite straightforward. Being an overlay, it is plotted over the closing price of the asset.
When the value of the asset falls below the closing price, the indicator turns green, indicating the opportunity to buy.
On the other hand, if the indicator rises above the closing price, the lights turn red, indicating the opportunity to sell. It doesn’t get any simpler than that.
Benefits of the SuperTrend Indicator
The SuperTrend Indicator is an excellent tool for intraday traders. Due to its popularity, it is available on most trading websites without any additional costs. A big advantage of this tool is its flexibility. It works for forex, futures, and equity, and it also allows you to set up various time frames from daily to weekly.
The indicator gives accurate signals at precise times; however, one may have to tweak the two parameters in order to minimize the error in the displayed trend.
The biggest advantage of the indicator is its simplicity. It provides all the essential information while keeping the interface minimal and easy to understand.
The SuperTrend Indicator is amongst the most straightforward and intuitive indicators that provide buy and sell signals.
However, the SuperTrend Indicator is not ideal for each and every situation and works only when the market is trading.
As such, it is best suited for the purpose of short-term technical analysis. If you are looking for a way to make better-informed decisions on intraday trades, you can’t go wrong with the SuperTrend Indicator.
