Let's look at their operating principles, numerical values, optimal timeframes for their use, and also analyze a strategy that combines these indicators + examples of transactions with calculations based on Binance charts.
Theoretical justification and numerical values of indicators
SuperTrend
SuperTrend is a trend indicator based on ATR (Average True Range) and moving averages. It helps identify trends and generate buy and sell signals.
Numerical values:
Parameters: ATR period (usually 10) and multiplier (usually 3).
If the price is above the SuperTrend line – the trend is upward.
If the price is below the SuperTrend line – the trend is downward.
How to read the chart:
The SuperTrend line changes color when the trend changes.
If the price breaks the SuperTrend line downwards, a sale can be considered.
If the price breaks the SuperTrend line upwards, a purchase can be considered.
Best time frames: 1H, 4H, 1D.
Trix (Triple Exponential Average)
Trix is an oscillator measuring the percentage change of the triple exponential moving average. It smooths price fluctuations and helps identify momentum and reversals.
Numerical values:
Key parameter – period (usually 14 or 18).
Crossing the zero line upwards – a buy signal.
Crossing the zero line downwards – a sell signal.
Positive Trix value = upward momentum.
Negative Trix value = downward momentum.
How to read the chart:
The Trix curve crosses the zero level, signaling a trend change.
Reversals and divergences may indicate a weakening trend.
Best time frames: 1H, 4H, 1D.
Parabolic SAR (Stop and Reverse)
Parabolic SAR is designed to determine trend reversal points. It is displayed as points above or below the candles.
Numerical values:
Key parameters: step (usually 0.02) and maximum value (usually 0.2).
SAR above the price = downtrend.
SAR below the price = uptrend.
How to read the chart:
If SAR points appear below the candles, this is a buy signal.
If SAR points appear above the candles, this is a sell signal.
A rapid convergence of SAR points with the price may indicate an imminent reversal.
Best time frames: 30M, 1H, 4H.
ADX (Average Directional Index)
ADX shows the strength of the trend without indicating its direction. It consists of three lines: ADX, +DI, and -DI.
Numerical values:
ADX < 20 – weak trend (flat).
ADX > 25 – strong trend.
Crossing +DI and -DI:
+DI above -DI = bullish trend.
-DI above +DI = bearish trend.
How to read the chart:
The higher the ADX, the stronger the trend.
If ADX is rising, the trend is gaining strength.
If ADX is falling, the trend is weakening.
Best time frames: 1H, 4H, 1D.
Strategy using indicators
Strategy: Trend following with confirmation
Conditions for entering a long position:
1. Price above the SuperTrend line.
2. Trix crosses the zero line upwards.
3. Parabolic SAR shows points below the candles.
4. ADX above 25, +DI above -DI.
Conditions for entering a short position:
1. Price below the SuperTrend line.
2. Trix crosses the zero line downwards.
3. Parabolic SAR shows points above the candles.
4. ADX above 25, -DI above +DI.
3. Example trade (Binance chart, spot market)
Let's consider a trade on the 1H time frame BTC/USDT:
Entering long: The price crossed the SuperTrend upwards, Trix is above zero, SAR is below the candles, ADX = 27, +DI is above -DI.
Entry point: 94,960 USDT.
Stop-loss: Below the last local minimum (94,500 USDT).
Take profit: Nearest resistance level (96,000 USDT).
Profit calculation (spot):
Trade volume: 1 BTC.
Potential profit: (96,000 - 94,960) * 1 BTC = 1,040 USDT.
Risk: (94,960 - 94,500) * 1 BTC = 460 USDT.
Risk/reward ratio = 1:2.26 (optimal value).
4. Example trade (futures, x5 leverage)
Let's consider a trade on the 1H time frame BTC/USDT with 5x leverage:
Entering short: The price broke the SuperTrend downwards, Trix is below zero, SAR is above the candles, ADX = 30, -DI is above +DI.
Entry point: 94,800 USDT.
Stop-loss: 95,200 USDT.
Take profit: 93,600 USDT.
Profit calculation (futures, 5x):
Trade volume: 1 BTC with 5x leverage (margin 18,960 USDT).
Potential profit: (94,800 - 93,600) * 5 = 6,000 USDT.
Risk: (95,200 - 94,800) * 5 = 2,000 USDT.
Risk/reward ratio = 1:3 (good value).
Using SuperTrend, Trix, Parabolic SAR, and ADX in conjunction allows for effective filtering of false signals and trading with the trend. This strategy is suitable for spot and futures trading and can be adapted to different time frames. The main thing is to consider risk management and confirm signals with multiple indicators.
P.S. The following conclusions can be drawn from the charts:
Overall analysis of the current situation:
1. Price:
On the 4-hour (4H) chart, BTC is trading around 94,956 USDT.
On the daily (1D) chart, the price is 94,993 USDT, but the daily decline was -1.31%.
Range for 24 hours: 93,817 – 96,500 USDT, indicating volatility.
2. SuperTrend:
On the 4H chart, the indicator shows a downtrend, as the price is below the SuperTrend line.
On the 1D chart, a similar situation – the trend remains bearish, confirming the weakness of buyers.
3. Parabolic SAR:
Points are above the candles, which also signals a downtrend.
Until the position of the points changes, the trend remains bearish.
4. ADX (trend strength):
On the 4H chart, ADX 25.11 indicates a moderately strong trend.
On the daily time frame, ADX 33.61 confirms significant strength in the current movement.
5. Trix (momentum):
The indicator is below the zero line, indicating bearish momentum.
There is no upward reversal yet; selling pressure remains.
Growth or decline perspective?
Bearish scenario (continuation of decline)
The price remains below SuperTrend and Parabolic SAR, confirming a downtrend.
ADX above 25 indicates the strength of the current downward movement.
Lack of divergence on Trix indicates weakness in buyers.
If BTC does not hold above 94,500 USDT, a break down to the 93,000 – 92,500 USDT zone is possible.
Bullish scenario (reversal and growth)
For a trend change, BTC needs to establish itself above 96,500 USDT.
Crossing Trix above 0 and changing the position of Parabolic SAR (points below the candles) will give a signal to rise.
ADX should be decreasing, and +DI should cross -DI upwards.
In this case, the growth target is 98,000 – 100,000 USDT.
So far, bearish signals prevail on the daily and 4H charts. To confirm growth, we need to wait for a trend change by SuperTrend and Parabolic SAR, as well as a Trix crossing above zero. If the price does not hold above 94,500 USDT, there is a high probability of further decline.
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