STOCK EXCHANGE GUIDE
Everyday marketers use a variety of technical indicators to get in and out of jobs to make a profit. They use statistics such as moving averages, Fibonacci retracement, stochastic oscillators, Bollinger bands, Relative Strength Index and Super-Trend indicators, among others. Of these, the super-trend index, created by Olivier Sean, is known for helping investors identify trading (buying and selling) with accuracy.
As the name suggests, it signifies the direction of price inflation in the leading market, following any particular path. It is charted with stock price charts for investors to see current trends that are usually shown in red when prices have fallen and green when prices have risen.
The Super-trend index is based on the BSE Sensex price chart shown below
How does the Super-Trend Indicator work?
The super-trend indicator is based on basic dynamic values - time and quantity. ATR is another indicator that gives you the amount of market instability by reducing the range of security prices over a period of time.
The true distance indicator is the highest of these values (current value of current output), total value (internal value) of current output and total value of current low output.
To calculate ATR, we need to find the TR values first, and then divide the above by the number of times represented by n. In this way, you get a moving average of true distances.
Formula
Putting the above details in an ATR formula, it looks like
TR = Max [(high high -crentrent low), Abs (high high - close close), Abs (low low - close close)]
ATR = (1 / n)
TRi is a true distance
n trading times or days
This is the formula that means working behind the index. But for most trading platforms, all you have to do is look at the super-trend indicator and select Periods (ATR number of days) prices and multiplication. Multiplication is the number by which ATR will be repeated. Typically, retailers use ten times more than 3 times. N n shorter values can bring more signals and work better in price fluctuations. A long n-value can remove the noise of daily value actions, and there will be fewer signals to be performed.
Buy and sell tokens
The super-trend indicator is set above or below the closing price to indicate buy or sell. The indicator changes color, depending on whether you should buy or not.
If a super-trend index goes below the closing price, the index becomes green, and sign an entry point or purchase points. If the main trend closes over, then the index indicates a red sales signal.
You will also see that the point at which the signal is being traded or traded is the point of passing. In the meantime, the buy signal is made and the index turns green you will see, when you move the index to this point, the closing value is higher than the index value. Similarly, when a trading signal is generated, and the indicator becomes red, the closing value will appear to be lower than the indicator value.
Several security
Although the super-trend index was initially widely used by traders in the stock market, given its accuracy in dealing with price volatility, it became a popular indicator of other securities and asset classes including currency, futures and foreign exchange markets.
Support and resistance
By the nature of the supertrend indicator, we offer strong levels of support and resistance for traders to get in and out of jobs. In addition, it also provides signals for setting stop loss.
The way it works, for example when the buy signal (green) is turned on, when prices drop towards the index, you can enter or move longer at this level, doubling as a support level. Similarly, when opening a trade signal, in red, the price points approaching or touching the index can serve as resistance levels.
What level is appropriate to set the stop loss? If you have traveled too far, stop loss can be set at a level below the green line. If you plan to take a short position, you can hold on until the price drops below the red line.
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