If the ATR of a stock is 50, then it means that on average the stock is likely to move 50 points either ways up or down. It is important to remember that ATR does not provide an indication of price direction, just volatility. The Average True Range was developed to capture this “missing” volatility. A volatility formula based only on the high-low range would fail to capture volatility from gap moves. Supertrend does not predict the direction, rather once the direction is stabilised it will guide you to initiate a position and suggests you stay in the position till the trend sustains.Īverage True Range (ATR) is an indicator that measures volatility. The indicator line changes its colour between green and red based on the price movement in the underlying. The supertrend indicator is plotted on the price chart of the stock or the index. It is really simple to use.īefore understanding the supertrend indicator formula, understanding the ATR is necessary as supertrend employs ATR values to calculate the indicator values. This indicator is overlaid on the price chart and the direction of the arrow shows you the current trend. If you are an intraday trader or you want to make quick trading decisions based upon technical analysis then Supertrend Indicator will make things easier for you. So are you wondering, what is the Supetrend Indicator? Get ready because you are going to become rich after using the supertrend indicator for intraday trading. The Supertrend indicator is simply one of the easiest trend trading system yet it is very effective. In this post, you will learn about the supertrend indicator that gives buy sell signals and will help you to maximise profits and reduce risk in intraday trading.
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