Let me explain it to you. Even though it seems simple, the SuperTrend indicator gives me the inside scoop on what’s happening in the market and makes my trading experience a lot easier. Seriously, it’s my go-to for getting started, especially while I'm still figuring out my strategy.
Here’s the deal: my broker, explore comprehensive trading insights with PocketOption broker platform, has just introduced the SuperTrend Indicator as part of their standard toolkit for technical analysis. This means even beginners can start making money on binary options by just adjusting some easy settings.
Check Out the SuperTrend Look and Formula
In the settings, I can see the SuperTrend indicator displayed over my price chart. It has a cool look, shifting between red and green candles.
I bet you guessed that the first line is my resistance line, while the second one is my support line.
So, how do they calculate the numbers? Check it out:
- ST higher = (higher + lower) / 2 + m * ATR (n)
- ST lower = (higher + lower) / 2 – m * ATR (n)
The variable n represents the number of ATR periods, and m is my volatility multiplier.
Since it's automated, I don’t have to worry about the calculations for the SuperTrend indicator; the algorithms handle it for me.
When I'm trading with the SuperTrend indicator, I need to choose the right ATR period and multiplier value. By default, the platform sets ATR period = 10 and multiplier = 3. These presets are perfect for medium-term trading. But if I'm aiming for short- or long-term trades, I need to adjust those settings a little.
If I lower the ATR and multiplier, the ST indicator will react too much to price changes, increasing the market noise. On the other hand, setting those numbers too high leads to slow signals.
Pro Tips for Using the ST Indicator
Let me share some tips for using the SuperTrend indicator to manage my risks while trading binary options. First, I should avoid taking trades based solely on the signals when the chart looks flat. The ST indicator works best with some movement. If I want, I can switch the ATR calculation method in the settings from the default RMA to SMA. This tool is user-friendly and gives me an accurate read on the trend action.
Next, I maximize my reliability by sticking to timeframes of 30 minutes and above. These intervals aren’t really meant for quick trades.
And finally, trading based on the indicator signals? It’s straightforward:
- I go for the CALL option when the line turns green, and that nice “Higher” shows up;
- The PUT option’s my move when the line turns red, and the red “Lower” appears;
Remember, the expiration period has to be at least three bars. So, if I'm working with the M 30 timeframe, my contract expiration will be 1.5 hours.
No doubt, even I, as a beginner, can get the hang of using SuperTrend. If I follow the plan mentioned, this indicator provides pretty clear signals. I’m talking about an average of 8 out of 10 winning trades.
Plus, my trading skills sharpen even more when I play it smart with money management and use the Martingale strategy. That’s how savvy traders cover their bases.
