Steemit Crypto Academy | Homework Task 5 For @stream4u | All About SuperTrend Indicator.

Hello steemians,
Today I am going to write an article that deals with the subject of the SuperTrend indicator as part of the homework offered by professor @stream4u in the fifth week , so welcome and happy reading for all.

What Is A SuperTrend Indicator?

The SuperTrend is a trend indicator allowing the traders to identify bullish or bearish trends in a market, the SuperTrend is also used to place protection spots at the appropriate times.

The SuperTrend is based on two variations of price change and time. If the price does not move, the SuperTrend will move horizontally, which will ultimately have no effect on the trend. A trend reversal can only be created if there is a cross between price and SuperTrend. We will therefore notice that the movement will never be continuous following a bearish or bullish movement.

The SuperTrend will not change direction until there is a significant reversal in price. In short, the more powerful the movement, the faster the SuperTrend is heading for the price. On the other hand, the SuperTrend does not change direction at the slightest correction!

How to set SuperTrend on Chart in Tradingview?

Tradingview allows us to display in addition to our price reading, one or more technical indicators.

Some indicators are displayed directly on the price like a moving average, Bollinger bands ... because they are based on the same scale as the price. Others show up in a separate window, by default below (but it's not frozen), like an RSI, MACD, and SuperTrend these are called derived indicators. They therefore no longer have the same scale.

To get this indicator on your chart, you can do the following:

• To start Click on Chart

_{TradingView Main Menu}

• Choose the desired crypto currency pair (for my case I chose the TRX / BTC pair) and click on the fx indicator
  tab

_{Graphic screen}

• An indicator window is displayed, type the name SuperTrend in the search box and a list of indicators with the same name of the indicator is provided, Choose one from among it.

_{indicators and strategies window}

Finally, the Supertrend indicator is displayed on the chart as follows by adding its name at the top left:

_{TRX/BTC chart with Supertrend indicator}

For a temporal configuration, so that your charts are displayed only in the time units that you want. To do this, simply click on the small wheel of the contextual menu under the visibility tab. Each time unit can be activated or not on demand.

_{Temporal configuration}

How SuperTrend Shows Buy-Sell Indications?

The red / green line of the indicator allows you to set very interesting trailing stops. In fact, by taking a buy order during an uptrend (green line), we will be able to exit our position as soon as the price crosses this line, which means a change in the downward trend which has the effect of placing the red line. above the course.

In an uptrend the green line of the previous chart shows support areas and in a downtrend it is the red line that shows resistance.

Each trend reversal (line that changes color and is placed below or above) can indicate the right time to buy / sell or take short / long positions in futures markets.

_{SuperTrend Resistance /Support Lines}

When We can place a Buy Trade with the help of SuperTrend Indicator?

A buy signal is generated when the price is above the indicative value. At this time, the indicator color turns green. The signal can also be thought of as a kind of "crossing" of the price and the indicator.

In the example below showing the BTC / USD pair, the SuperTrend generated a long buy signal on October 20, 2020, and the indicator remains bullish until now. The trader was able to achieve over 40,000 points with this trade.

Once the long position is in the market, it is recommended to hold it until the price closes below the green line. The green line can then be used by the trader as a sort of stop trader for the long position.

_{BTC/USD Chart With SuperTrend}

When we can place exit/square off, sell order with the help of SuperTrend Indicator?

If the price is lower than the value of the indicator, a sell signal is generated. In this situation, the indicator color changes from red to green. Again, the signal can be seen as a kind of cross between the price and the indicator.

In the example below, The SuperTrend of Sept 16, 2020 indicator has generated a sell signal. It was not until Nov 20 that the indicator changed from red to green. The trader was able to close the trade with a gain of around 11 points.

Once the short position is in the market, the trader should hold it until the price closes above the red line. The red line is also useful in this case, as it serves as a stop tracker for the short position.

_{TRX/USD Chart With SuperTrend}

How false indications look in SuperTrend Indicator?

It should not be overlooked that the SuperTrend is above all a trend indicator. It serves to stay in the trend as long as possible, as the two examples impressively show. In phases with no trend, called sideways markets, the SuperTrend tends to generate more false signals. If the trader wants to avoid them, he will have to use other technical analysis instruments in addition to the SuperTrend.

_{SuperTrend False signals}

According to your view what Stoploss you will suggest?

When you are new to trading, placing a stop is not easy. We want to secure our position and control the risk as much as possible, but sometimes we lose by wanting to place it too close or too far. Here are some tips for effectively placing your stop.

Before opening your position, you will need to define the location of your stop loss.

When you have entered a sell position, it is possible to place a stop loss a little above the super trend.
When you have entered a buy position, it is possible to place a stop loss a little below the super trend.

In order to secure the gains, it is recommended to cut 25% of the position each time you encounter resistance, this also allows you to optimize your gains.

Conclusion.

Among the advantages of a super trend is that it sends out precise signals on time. The index is accessible free of charge via many trading platforms. The indicator offers the fastest technical analysis to allow intraday traders to make more flexible decisions. As mentioned earlier, it is very easy to use and compromise.

However, the indicator is not suitable for all situations. It works when the market is in a trend. So it is best to use it for short term technical analysis.