Those who are involved in intraday trading commonly use technical analysis and indicators to spot the trend and price move. Besides, they help to identify the best market entry and exit positions. The Supertrend indicator for MT4 generally serves as the trading signal provider.
The indicator works for trading markets and makes it possible to determine precise buy and sell signals. As you might have figured out from the tool's name, the instrument acts in the same way as MACD or moving averages. When the indicator is in action, it plots on the price to indicate its placement along with the current trend.
Despite the fact that the Supertrend indicator for MT4 is pretty easy to use and does not require special technical knowledge from the trader, false singles might still occur. Besides, you do not have it integrated with the trading platform by default. So, in this article, we will show you how to read and install it with just a few clicks.
What Is an MT4 Supertrend Indicator?
The MT4 Supertrend indicator is the tool that refers to a trend following overlays. It contains two major parameters: the period and the multiplier. Besides, traders should consider default values that include 10 for every true range aтd 3 for the multiplier.
Just similar to moving averages, the indicator shows the direction that the current trend is going to follow. The instrument implements the ATR for the calculation with the current market volatility in mind. What's more, the adjusted ATR uses a multiplier's default settings to depict the indicator's sensitivity.
How Does MT4 Supertrend Indicator Work?
When the colors change, they help traders to determine the trend direction. There are two major ways to read the MT4 Supertrend indicator:
- The tool generates a "buy" signal every time the color turns to green. It results in the closing price placed above the line.
- If the color flips to red, it means that the price is set on the opposite side of the line generating a "sell" signal.
The tool generally provides traders with reliable signals. On the other hand, false signals may also take place. So, make sure you have a confirmation to move on with the next order.
MT4 Supertrend Indicator Parameters
Just like any other instrument to conduct technical analysis, the indicator comes with built-in parameters that can be changed or configured to suit your personal trading style. Traders are able to make it less or more sensitive depending on the strategy they use.
Here are some basic period and factor configuration that you may adjust:
- For the period settings, the indicator comes with a recollection for the ATR calculation.
- Factor settings include the ATR calculations multiplied to offset the price from bands.
The best idea is to test all settings before you enter the market. Make sure the indicator's sensitivity suits your trading techniques.