"super trend stops" indicator
- Thread starter Jdesey
- Start date
Yes, I remember (vaguely) ... it's just an ATR multiplier, I think?
It can allegedly be used for trade entries as a sort of "volatility breakout indicator" (but surely an awful one?), or as a kind of trailing stop.
It "can't possibly" be as good, over the long term, as simply trailing a stop-loss manually just above/below the most recently formed swing-high/low of the price. I can't prove that at all, needless to say, but if anyone can disprove it, I'll eat my shoes (I'm not still wearing hats).
In short, it's a substitute display for a combination of an ATR and a multiplication factor and some thought about how ATR can really help. I'd advise against it, really.
I've used SuperTrend (ST) for years. I see intraday trends as 3 levels of strength as they progress: the 9 wma, the 20 ema and the ST.
The common practice is to use the ST as a stop loss or reversal. I don't. I use it for a S/R on the first two touches in a strong trend or as an area to fade in a channel. You'll get very good reward to risk ratios off of it for not having to be more than 45-55% right.
If I'm trading a 1 min chart and price is surging well, I'll look at the levels of the ST on either the 5/15/30/60 min for targets. That is, in an uptrend, the ST will be below price, and I'm looking for a ST that's above price on a higher timeframe for resistance. Like it also on the 5 tick range chart for faster trading on the e-minis and CL.
There's a lesson in this I guess. One day, I put it on my charts, made no judgements of its efficacy, didn't read up on "how to use it", made my own decisions on how/where/when it was useful after several months of intraday monitoring.
I HATE hunting for horizontal S/R across timeframes. The ST finds ones that are just as good as any others and it's zero analysis in real-time. That's a big deal to me on 1 min and 5 tick range charts.
[BTW, go to the last post I made before this. Yesterday, every e-mini was a dog just after the first hour of RTH...except the NQ. What did I say? DON'T LET PRICE GET AWAY FROM THE FIRST HOUR RANGE WITHOUT YOU ON BOARD.]
The common practice is to use the ST as a stop loss or reversal. I don't. I use it for a S/R on the first two touches in a strong trend or as an area to fade in a channel. You'll get very good reward to risk ratios off of it for not having to be more than 45-55% right.
If I'm trading a 1 min chart and price is surging well, I'll look at the levels of the ST on either the 5/15/30/60 min for targets. That is, in an uptrend, the ST will be below price, and I'm looking for a ST that's above price on a higher timeframe for resistance. Like it also on the 5 tick range chart for faster trading on the e-minis and CL.
There's a lesson in this I guess. One day, I put it on my charts, made no judgements of its efficacy, didn't read up on "how to use it", made my own decisions on how/where/when it was useful after several months of intraday monitoring.
I HATE hunting for horizontal S/R across timeframes. The ST finds ones that are just as good as any others and it's zero analysis in real-time. That's a big deal to me on 1 min and 5 tick range charts.
[BTW, go to the last post I made before this. Yesterday, every e-mini was a dog just after the first hour of RTH...except the NQ. What did I say? DON'T LET PRICE GET AWAY FROM THE FIRST HOUR RANGE WITHOUT YOU ON BOARD.]
I agree with your point on "how to use it". If you want to try a tool, put it on your charts and observe it's behavior vis a vis price behavior. If something pops out to you, test it.
Related ... I'm using "TrendQuality" indicator that comes with TOS. Like dozens of other indicators I've tested, I may eventually cull it, but right now I have it. https://tlc.thinkorswim.com/center/reference/Tech-Indicators/studies-library/T-U/TrendQuality.html