the best strategies that you can use with the super trend
indicator if you're still a new trader and you want to find a very simple
indicator that not only tells you the direction of a trend but also gives
specific buy or sell signals that you can just follow immediately then the
super trend is the perfect indicator for you so a good thing about this
indicator is that not only it's very simple to use but it's also a very good
indicator because the super trend is based on the atr so that means the
indicator generates signals not only based on the momentum but also the current
volatility of the market so if you open
the super trend indicator this is what it looks like a single line that switches
from green to red and vice versa and
how you use it is pretty self-explanatory if the line turns
green meaning you take a buy position and if the line turns red meaning you
close your previous buy position and open a new cell position but there's actually
one big problem if you use the strategy this way because the super trend
indicator is constantly giving out signals non-stop so when you're using this
indicator there are no times where you don't take any positions it's either you
are forced to take a buy or sell position there are no stops so this can be a
huge problem because if you're a trader you need to know that the market isn't
always trending the market can also go in a range so because the super trend is
constantly showing signals non-stop meaning it will also show signals
when the market is on a range like in this example you can
see that the market was on an uptrend and the super trend displayed a buy
signal and now you see that the trend had already ended and the market went
flat but the problem is because the super trend is always giving signals it
displayed a sell signal even though there wasn't any trend so what we need to
do is filter out these range markets so that we only take signals from the
super trend if the market is actually trending this is how you do it first you
need to put three super trend indicators the first indicator value you need to
set it by 3 and 12. the next one you set it as 1 and 10 and the third one you
set it as 2 and 11. so the way we use the supertrend strategy is by only taking
positions if all the lines are in the same color for example in this chart we
can see that the bottom line turned green but the other two lines are still red
so you don't want to take positions yet next you can see at this point all the lines
turned green and this is where you want to take a buy position
let's look at another example in this chart we can see that
the top line turned red but the other two lines are still green so you don't
want to take any positions yet next you can see all the lines are now colored
red so this is where you want to take a cell position and for our exit signal
there's actually a lot of ways you can do this the first one is set a take
profit or stop loss so you close your position if your trade reaches a certain
amount of profit or losses another way is if the color of the lines no longer
matches like in this example we can see that the color of the lines are all
green so you take a by position next you can see that one of the lines switches
to a red color and now that the lines no longer matches
this is where you want to close your buy position the next
strategy that i personally use when trading the super trend indicator is by
combining it with another indicator such as the 200 ema so because the super trend can be used to
detect short to medium term trends and the 200 ema line can be used to detect
longer term trend that is why these two can be the perfect combination for this
strategy i'm using the default settings of the super trend indicator this is
how you trade the strategy so you only take buy signals from the super trend
when the price is above the 200 ema line and you only take sell signals from
the indicator if the price is below the 200 ema line let me give you an example
in this chart we can see that the super trend gave a buy signal but the price
is still below the 200 ema line so we don't want to take positions yet once the
price crosses above the 200 ema line
while the super trend is still colored green that is the
time where you want to take a buy position and you close your trade here when
the super trend turns red let's move on to another chart you can see that the
super trend indicates a sell signal but the price is still above the 200 ema so
we don't want to take positions yet now once the price is below the 200 ema
line while the super trend is colored red that is where you want to take a cell
position next you can see that the super trend turns green so this is where you
want to close your position another strategy that you can combine with the
super trend is with the kumo cloud so the kumo cloud is basically just an
ichimoku cloud indicator that you disabled all the parts except the two lead
lines and i'm also going to change the color so that it's easier to look at so
now we have the komo cloud the rules of the kumo cloud is
very simple if the price is above the kumo cloud you only take buy signals and
if the price is below the kumo cloud you only take cell signals but if the
price is inside the clouds you don't take any positions let me give you an
example in this chart we can see that the indicator gave a buy signal but the
price is still below the clouds so you don't want to take positions yet next
you can see that the price is inside the clouds so you also don't take any positions
here next you can see that the price is above the clouds while the super trend
is colored green so this is where you want to take your buy position and it's
exactly the same for our sell signal as well we only take cell positions if the
price is below the clouds and the super trend is colored red and for our exit
strategy there are actually a couple of ways you can do this the first one is
you can set a take profit or a stop loss so you close your trade if it reaches
a certain amount of profit or loss you can also close your trade if the price
crosses over the clouds like in this example you can see that the candle closed
inside the clouds so you can close your position here.