This is a supertrend with slight twisted concept which can be very benefecial in strong trending markets to reduce stop loss distance and exit slightly quicker.
⬜ Concept
▶ When the instrument is trending up, regular ATR shows high values if there are big green candles. This affect the stoploss distance in regular supertrend which leads to wide stops or delayed lagging. When you are in long trade, what matters for stoploss is how much a negative candle can move within bar. Hence, using ATR derived only based on red candles is more beneficial for trailing stops on long signals. Same applies to short trades where using ATR derived from only green candles is more efficient than overall ATR.
▶ ATR will be minimal when the volatility is less and ATR will increase with volatility. That means, once you are in trade, the trailing of stoploss also will vary based on ATR (or volatility). With regular ATR and supertrend, chances of stop loss distance widening is high with increased volatility even though stoploss levels will not move down. This again poses the risk of higher drawdown during trade closure and also keeps in the trade during ranging market. To avoid this, the second trick we are using here is only to reduce the atr stoploss difference when in trade. That is, when in long trade and negative candles ATR is increasing, we will not consider that. We will consider the new ATR only if it is lesser than previous bar ATR.
Effect of these changes on the trending market is quite visual. Lets take example of USDTRY
https://www.tradingview.com/x/9wtbnKiR/
Settings are quite simple and does not vary much from regular supertrend settings.
https://www.tradingview.com/x/w4WAnHN0/
⬜ Concept
▶ When the instrument is trending up, regular ATR shows high values if there are big green candles. This affect the stoploss distance in regular supertrend which leads to wide stops or delayed lagging. When you are in long trade, what matters for stoploss is how much a negative candle can move within bar. Hence, using ATR derived only based on red candles is more beneficial for trailing stops on long signals. Same applies to short trades where using ATR derived from only green candles is more efficient than overall ATR.
▶ ATR will be minimal when the volatility is less and ATR will increase with volatility. That means, once you are in trade, the trailing of stoploss also will vary based on ATR (or volatility). With regular ATR and supertrend, chances of stop loss distance widening is high with increased volatility even though stoploss levels will not move down. This again poses the risk of higher drawdown during trade closure and also keeps in the trade during ranging market. To avoid this, the second trick we are using here is only to reduce the atr stoploss difference when in trade. That is, when in long trade and negative candles ATR is increasing, we will not consider that. We will consider the new ATR only if it is lesser than previous bar ATR.
Effect of these changes on the trending market is quite visual. Lets take example of USDTRY
https://www.tradingview.com/x/9wtbnKiR/
Settings are quite simple and does not vary much from regular supertrend settings.
https://www.tradingview.com/x/w4WAnHN0/
Notas de prensa
Updated libraries.Notas de prensa
Added Alert Conditions to Highlight bullish and bearish transitionNotas de prensa
Update to V6Notas de prensa
UpdateAdded trend signal as data window only plot. This is done in order to use the the indicator as trend signal for external oscillators
Script de código abierto
Fiel al espíritu de TradingView, el creador de este script lo ha convertido en código abierto, para que los traders puedan revisar y verificar su funcionalidad. ¡Enhorabuena al autor! Aunque puede utilizarlo de forma gratuita, recuerde que la republicación del código está sujeta a nuestras Normas internas.
Trial - trendoscope.io/trial
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Blog - docs.trendoscope.io
Subscribe - trendoscope.io/pricing
Blog - docs.trendoscope.io
Exención de responsabilidad
La información y las publicaciones no constituyen, ni deben considerarse como asesoramiento o recomendaciones financieras, de inversión, de trading o de otro tipo proporcionadas o respaldadas por TradingView. Más información en Condiciones de uso.
Script de código abierto
Fiel al espíritu de TradingView, el creador de este script lo ha convertido en código abierto, para que los traders puedan revisar y verificar su funcionalidad. ¡Enhorabuena al autor! Aunque puede utilizarlo de forma gratuita, recuerde que la republicación del código está sujeta a nuestras Normas internas.
Trial - trendoscope.io/trial
Subscribe - trendoscope.io/pricing
Blog - docs.trendoscope.io
Subscribe - trendoscope.io/pricing
Blog - docs.trendoscope.io
Exención de responsabilidad
La información y las publicaciones no constituyen, ni deben considerarse como asesoramiento o recomendaciones financieras, de inversión, de trading o de otro tipo proporcionadas o respaldadas por TradingView. Más información en Condiciones de uso.