How to use Super Trend indicator

Super Trend is a very simple and smooth indicator to identify a trend, therefore it helps to identify the current market trend along with uptrend and downtrend confirmation it can be used for intraday ,positional and long run trading purpose. The Super Trend indicator is plotted over the price chart of the stock or the index

How to calculate Super Trend Formula:

If the price is above the line then it acts as a point of support, and if below the line it acts as a point of resistance: value is displayed in an upward trend:

average price= high+low/2

offset= Coefficient *Average True Range(n period)

Super Trend Resistence = Average price + Offset

Super Trend support = Average price – Offset

The default Average True Range period is 10 and the default 'coefficient' is 3.

A stock experiencing a high level of volatility will have a higher ATR, and a low volatility stock will have a lower ATR

Super Trend is constructed with two parameters, and the commonly used ones are 10 and 3. The 2nd parameter can be reduced if you want Super Trend to react more rapidly to price changes but it may end up generating more false signals, so the default parameters work just fine.

How to Identify trend with Super Trend indicator:

If indicator is flat and flipping from above to Super Trend line and below it line means there is no trend at the present time means consolidation on that particular time frame

If price is continuously trading above the Super Trend indicator on continuously basis means there is uptrend on that particular time frame.

If price is continuously trading below the Super Trend indicator on continuously basis means there is downtrend on that particular time frame.

So we can safely conclude that Super Trend is a trending indicator, but if we have better workout on this indicator so we can get up to 75 percent accuracy as we know that There’s nothing perfect in Technical Analysis but with help of Super Trend we can minimise so many false signals in sideways trends,and Super Trend helps catch the big moves However, it does give lesser false signals than a lot of other indicators and so if you are an intraday and short and long term trader who wants to use this indicator as part of your trading strategy surely all can use as we discussed with above given factors.

How to buy and sell with Super Trend indicator:

Buy: Buy when the closing price turns greater than the indicator value. Once you made long position ,hold the position till the price closes above the Super Trend indicator Value or line. In this all trading style indicator line helps as a trailing stop-loss for the Buying or long position.

Sell: Sell when the closing price lesser than the indicator value or downward closing below indicator line of closing price of stocks/indices . hold the position till the price closes below the Super Trend indicator Value or line. In this all trading style indicator line helps as a trailing stop-loss for exiting short position

Note:  In both the above cases traders is advised to hold the position till the price closes above or below the indicator line or value.

                                      This is for my personal study not for trading purpose. Thanks.

.