Intraday traders make use of multiple technical indicators to enter or exit trades for profit. They also use calculations such as Bollinger bands, Fibonacci retracement, moving averages, super trend indicator NinjaTrader 8, relative strength index, and many more.
Out of all these, only the super trend indicator has been popular in helping investors to spot trades with proper precision. A super trend indicator can help indicate the direction of the price movement in a trending market following any specific path. In this blog, you will learn more about super trend indicators and how they work.
How Does a Super Trend Indicator Work?
The super trend indicator depends on two fundamental dynamic values, mainly the period and multiplier. But before you get into that, you must know more about the concept of Average True Range or ATR. ATR is another indicator that can provide you with market volatility value by loosening up the price ranges of security for a specific time. A true-range indicator is considered to be the highest of the current high minus the current low value, the absolute value of the current low, and the current high minus the previous close.
Purchasing and Selling Signals
The super trend indicator NinjaTrader 8 is plotted either below or above the closing price to signal a purchase or sale. The indicator will usually change color depending on whether you must purchase it or not. If the super trend indicator moves below the closing price, the indicator will turn green and signal points to purchase or an entry point.
But if the super trend closes above, it will display a sell signal in red. You will also see that the point where the buy and sell signal is generated is considered the crossover point. If a buy signal is made and the indicator becomes green, you will notice that the price will be higher than the indicator value. In the same way, when a sell signal is generated, and the indicator becomes red, the closing price will be lower than the indicator value.
Various Securities
Though the super trend indicator NinjaTrader 8 was mostly used by traders in commodity markets, it also became popular for different securities and asset classes. This is due to the precision of considering volatility factors in prices. It became a famous indicator for other asset classes and securities, including futures, equities, and foreign exchange markets.
Support and Resistance
Due to the nature of the super trend indicator, it usually offers strong support and proper resistance levels for the traders to enter and leave trades. It is also capable of providing signals for stop losses.
Read more also – [Video] What Easy Trend has to offer???
Final Words
You can read the blog above to learn more about the super trend indicator NinjaTrader 8 and how it works. Before you choose to trade, you must also know that super trend is used with other indicators like MACD and moving average. It is also one of the famous trend indicators found on the market that you can choose to use while trading.
Source – https://techplanet.today/post/what-is-a-super-trend-indicator-and-how-does-it-work
