Supertrend Indicator Technical Analysis Tamil Trading
Supertrend Indicator Analysis
Supertrend is a very simple indicator. The Buy and Sell signal changes as soon as the indicator flips over the closing price (see image below). When the Supertrend closes below the Price, a Buy signal is generated, and when the Supertrend closes above the Price, a Sell signal is generated. In Investar this is shown with green and red arrows so that all you have to do is use the green arrow for Buy and red arrow for Sell.
Supertrend is a trending indicator, and like all trending indicators it works well in trending markets (i.e. in uptrends and downtrends). There’s nothing perfect in Technical Analysis and so is Supertrend also; as it does give false signals in sideways trends. However, it does give lesser false signals than a lot of other indicators and hence if you are an intraday trader who wants to use indicators as part of your trading strategy, you definitely want to use Supertrend in your trading arsenal.
Supertrend Indicator Formula
Supertrend is constructed with two parameters, and the commonly used ones are 10 and 3. The 2nd parameter can be reduced if you want Supertrend to react more rapidly to price changes but it may end up generating more false signals, so the default parameters work just fine.