SuperTrend Indicator for MT5
- Indicators
-
Vijaykumar Jayantilal Panchal
20+ Years of IT Professional experience and doing forex trading since last 8 years.
Developing the Expert Advisors, Indicators, Script in MT4 & MT5 environments. - Version: 1.1
- Updated: 10 November 2022
- Activations: 5
The Supertrend is a relatively unpopular technical indicator that was developed - as stated above - by Olivier Sebam to help traders identify trends and know when to buy or sell a financial asset. The indicator is not found as a default in TradingView and MetaTrader. Still, you can find custom-made Supertrend indicators in the marketplace.
When applied on a chart, the supertrend indicator is visible with its two colors. While they can be changed, the default colors are usually red and green. When it is green, it is a signal to buy an asset while when it is red , it is a sign to sell an asset.
The supertrend indicator works well across all timelines. It can work in shorter timeframes like the 5-minute or longer charts like daily and weekly charts.
Identify buy and sell signals
As shown above, buy and sell signals are well marked in the supertrend indicator. A buy signal emerges when the price moves above the green part of the indicator.
On the other hand, a sell-signal is seen when it moves below the red section of the indicator. However, doing a multi-timeframe analysis will help you identify the best support and resistance levels.
Advantages and Disadvantages of the Supertrend Indicator
Advantages of the Supertrend Indicator include:
- Easy to interpret: The calculation isn’t very complex even for beginners.
- The predictions are fairly accurate: This is especially true during trending markets where the Supertrend is among the most reliable indicators available.
- Easy to configure: Since the number of input variables is lower, it can be easily adjusted to meet the trader’s requirements.
- No cost involved: It is available on many free platforms, and additional software or add-ins are not required to implement the indicator.
- Highly responsive: It is quick to detect a change in trend, making it very handy for traders looking to exploit opportunities as soon as they arrive.
The common disadvantages of using it are:
- Not accurate during consolidation periods: When the market is trending sideways, the Supertrend line may generate false signals.
- The outcome may contradict other tools: It may yield contrasting results that may not help your trading decisions.
- May not work well with all assets: Traders must ensure that the indicator is reliable in the specific asset before using it. While the signal may be strong, it may not apply to all assets.
