Supertrend Strategy

How to use...


I learned a new stock market indicator today.

Supertrend.

It was invented by Olivier Seban. It was designed for futures, forex, and equities but really works for any commodity. It has an unusually high accuracy of around 70- 80%. It is one of the few indicators that can be used in standalone technical analysis as it notifies the trader of an entry position and an exit position while also keeping track of a trailing stop loss. It is an indicator that relatively closely hugs the price curve of the stock.

Another important reason why the super trend is very famous among traders is for the fact that it has very good Risk-Reward ratio.

Usually, when a stock goes against us super-trend gives us exit signals minimizing our losses and if trend goes in our favour super-trend continues maximising our gains. That way our gains are automatically greater than losses.

Making the Risk-reward ratio greater than 1:2

 
 There's a lot more to supertrend. Keep testing.

What I think...
  • Good for buy signals.
  •  Not very profitable for sell signals. 
What next...
  • Use Yahoo Finance full chart under 2020 watch list. 
  • Use it with RSI and MACD.
  • No supertrend indicator in poems. 
Markets down this morning.  

No supertrend buy signals. 









Adrian's Journal
The rookie trader






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