Super Trend

$75.00

The Super Trend Strategy just might be one of the most flexible trending strategies you will ever use! With just about every configuration exposed to the user, you can customize, back-test, optimize, and get it to run however you want. Combined with its use of up-to three time-frames, you can have greater confidence in the signals generated.

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Description

The Super Trend Strategy just might be one of the most flexible trending strategies you will ever use! With just about every configuration exposed to the user, you can customize, back-test, optimize, and get it to run however you want. Combined with its use of up-to three time-frames, you can have greater confidence in the signals generated.

The Super Trend Strategy utilizes MooMooForex’s Trend Strength indicator to determine trend direction and strength in the short term. For confirmations, it can be configured to use an additional longer time-framed Trend Strength indicator.

Identifying a Trend is great, but what is more important is the entry. The SuperTrend Strategy is capable of zooming in at lower time-frames to time the best entry. By utilizing the Commodity Channel Index (CCI) and Slow Stochastic (SSD) indicators, the strategy is able to detect when there has been a slight pull-back in price, which often makes the best entry time for a long trend.

Check out all the configuration inputs available below!

Additionally, the SuperTrend Strategy also comes complete with the following special features:
– Supports 5 different types of Moving Averages: Simple, Exponential, Linear-Weighted, Smoothed, and Wilders.
– Can automatically calculate your Take Profit Limit based on a Risk-Reward of your choosing.
– Enhanced with “Smart Stop” which sets the stop order to be based off a configured range of recent highs or lows.
– Stops and Limits orders are set on the trades immediately – no hidden logic inside the strategy meaning you can stop the strategy, and doesn’t interfere with other positions.
– Enhanced email notification on signal indicating all trade inputs including stop loss and take profit values if applicable.

* Please note this strategy comes bundled with the Trend Strength indicator.

Inputs

  • Timeframe – The timeframe of the strategy. Default is m5.
  • CCI Periods – The CCI periods. Default is 30.
  • CCI Overbought – The CCI overbought level. Default is 100.
  • CCI Oversold – The CCI oversold level. Default is -100.
  • %K Periods – The SSD %K periods. Default is 15.
  • %D Slowing Periods – The SSD %D slowing periods. Default is 5.
  • %D Periods – The SSD %D periods. Default is 5.
  • Overbought – The SSD overbought level. Default is 70.
  • Oversold – The SSD oversold level. Default is 30.
  • Trend MA Periods – The number of periods to use to calculate the moving average. Default is 30.
  • Trend Averaging Method – The type of moving average to use in the Trend Strength. The following five calculation methods are supported (Default is EMA):
    • Exponential Moving Average (EMA)
    • Linear Weighted (LWMA)
    • Simple (MVA)
    • Smoothed (SMMA)
    • Wilders (WMA)
  • Trend Sensitivity – Number of periods to use for the Trend Calculation. The smaller the number, the more sensitive the indicator is. Default is 30.
  • Trend Threshold – The value must be over or equal to this threshold to be open for trading long, or under or equal to the negative of this threshold for trading short. Default is 1.0
  • Trend Timeframe – The timeframe to use for the Trend Strength calculation. Default is m15.
  • Confirm with Superlong Trend – Use another longer time-framed trend calculation for confirmation of trend direction and strength. Default is false.
  • Superlong Trend MA Periods – The number of periods to use to calculate the moving average. Default is 50.
  • Superlong Trend Averaging Method – The type of moving average to use in the Superlong Trend Strength. The following five calculation methods are supported (Default is EMA):
    • Exponential Moving Average (EMA)
    • Linear Weighted (LWMA)
    • Simple (MVA)
    • Smoothed (SMMA)
    • Wilders (WMA)
  • Superlong Trend Sensitivity – Number of periods to use for the Trend Calculation. The smaller the number, the more sensitive the indicator is. Default is 50.
  • Superlong Trend Threshold – The value must be over or equal to this threshold to be open for trading long, or under or equal to the negative of this threshold for trading short. Default is 1.
  • Superlong Trend Timeframe – The timeframe to use for the Superlong Trend Strength calculation. Default is H1.
  • Allow Trading – Should the strategy execute trades or signal only? Default is false.
  • Allow Buy Trades – Should we allow long positions? Default is true.
  • Allow Sell Trades – Should we allow short positions? Default is true.
  • Allow Hedge Trades – If an opposite signal arises, should we enter into a hedged position? Default is false.
  • Close On Opposite – If an opposite signal arises, should we automatically close the existing position? Default is false.
  • Account – The account to trade.
  • Amount in lots – The amount in lots. Default is 1.
  • Limit Type – The type of limit order to use. Valid options are: No Limit Order, Limit in Pips, Risk Reward (Stop) multiplier. The default is Risk Reward.
  • Limit – The limit value, if applicable. Default is 2.0.
  • Stop Type – The type of Stop order to use. Valid options are: No Stop Order, Stop in Pips, Smart Stop. Default is Smart Stop.
  • Smart Stop Range – The range of bars that Smart Stop will use to check for the lowest low and highest high to determine the Stop from. Default is 10.
  • Stop in pips – The stop in pips. If Smart Stop is enabled, the Stop will be offset by this number of pips from the lowest low or highest high as configured. Default is 100.
  • Trailing stop – Should the stop order be trailing. Default is false.

How does Limit Type Risk Reward work?

If the Limit Type is set to Risk Reward, the Limit is calculated as a multiple of the Stop. For example, assuming Limit Type is Risk Reward and Limit is set to 2.0….
– If your Stop in Pips is 20 pips, then your limit will be 40 pips.
– If your Start Stop calculation determines your Stop as 35 pips, then your limit will be 70 pips.

If you are looking to define a Limit in a fixed number of pips, please set the Limit Type to Limit in Pips.

How does Stop Type Smart Stop work?

Normally a stop defined in pips is based off the price the position was opened. Smart Stop examines the last n bars (as configured in the Smart Stop Range parameter) and finds the highest high/lowest low in this range. It then uses this value to base the stop from instead of the entry price.

Therefore, if Smart Stop is on, and the Stop Range is 10, and the Stop value is 20 then … when you buy, the stop should be set to 20 pips below the lowest low in the last 10 bars. If you sell, the stop should be set to 20 pips above the highest high in the last 10 bars.

If you are looking to define a Stop in a fixed number of pips, please set the Stop Type to Stop in Pips.

Buying Logic

A buy signal is generated when:

  • There are no existing long positions for the strategy,
  • The CCI crosses over from below the oversold threshold; and
  • The %K or %D Slow Stochastic is equal to or below the configured oversold threshold; and
  • Trend Strength is greater than or equal to the configured threshold; and
  • If configured to do so, confirms the Trend Strength on the longer timeframe.

The strategy will not open two positions simultaneously in the same direction.
The strategy is capable of opening hedged positions if the Allow Hedge Trades is enabled.

Selling Logic

A sell signal is generated when:

  • There are no existing short positions for the strategy,
  • The CCI crosses under from above the overbought threshold; and
  • The %K or %D Slow Stochastic is equal to or above the configured overbought threshold; and
  • Trend Strength is less than or equal to the negative of the configured threshold; and
  • If configured to do so, confirms the Trend Strength on the longer timeframe.

The strategy will not open two positions simultaneously in the same direction.

The strategy is capable of opening hedged positions if the Allow Hedge Trades is enabled.

Exit Logic

  • Close On Opposite: If this parameter is enabled, trade signals will close opposite positions.
  • Stops: A stop order is set, if configured to do so as per the specified configuration.
  • Limits: A limit order is set, if configured to do so, as per the specified configuration.

Example Use

Run the strategy on GBPJPY with everything as default except for the following parameters:

  • CCI Periods: 30
  • %K Periods: 15
  • Limit Type: Risk Reward
  • Limit: 1.0
  • Stop Type: Smart Stop
  • Stop: 90 pips
The screenshot below shows the Backtesting Results for Backtesting on GBP/JPY.m5 from 01/Feb/2012 to 1/Jan/2014 using the above configuration:
SuperTrend on GBPJPY for 2012 and 2013

Super Trend on GBPJPY for 2012 and 2013

Additional Comments

The SuperTrend Strategy is very flexible and therefore somewhat confusing to use when first exposed to it. We strongly recommend you play with the strategy and indicators in a demo or backtester environment to get a feel for how it works before running on a live environment.

Further Reading

This strategy was developed exclusively by MooMooForex. Additional reading may be found inside the Research blog.