The SuperTrend indicator is one of the popular technical indicators in forex trading, relying on moving averages and price range to accurately determine market direction. This indicator is used to identify entry and exit points from trades, and it often appears as a line that rises or falls above the price, changing color based on the trend: green for upward and red for downward.
The SuperTrend relies on two main factors: the multiplier and the Average True Range (ATR). The higher the multiplier, the farther the line is from the price, which reduces false signals but delays the response. When the price crosses the SuperTrend line from below to above, a buy signal appears, and the opposite is true for a sell signal.
The following chart illustrates an example of candlesticks with the SuperTrend indicator, where we see how the line changes according to the direction change:
🟩 Bullish candles are followed by buy signals
🟥 Bearish candles are followed by sell signals
📈 Green line = Upward trend
📉 Red line = Downward trend
