# Supertrend Indicator Guide for MT4/MT5

The Supertrend indicator, developed by French trader Olivier Seban and available in multiple languages, is designed to accurately identify price trends on MT4 and MT5 platforms. This indicator, when plotted on stock price charts, provides investors with a clear visual representation of the prevailing trend. As a trend-following indicator, the Supertrend generates buy or sell signals in the Forex market. While it excels in trending markets, its performance may be less precise in ranging markets. This guide delves into the intricacies of the Supertrend indicator for MetaTrader 4 and 5.

## What is the super trend indicator ?

I will start by defining the Supertrend indicator. A Supertrend is a trend-following indicator, similar to moving averages, that identifies the direction of the trend and provides precise buy or sell signals. The indicator is represented by two colors, red and green (which can be customized). A red Supertrend line indicates a downtrend and a sell signal, while a green Supertrend line indicates an uptrend and a buy signal.

### Indicator Setting

The Supertrend indicator, used in the MetaTrader trading platform, comprises two fundamental parameters: period and multiplier. These parameters have default values: 10 (days) for the average true range or trading period and 3 for the multiplier. You can customize these parameters to suit your trading style and market conditions.

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## Indicator formula

Calculation of the supertrend indicator MT4 is as follows:
• step 1: Calculate the basic upper band
Uptrend = (high + low) / 2 + M * average true range value M: Multiplier
• Step 2: Calculate the basis lower band
Downtrend = (high + low) / 2 – M * average true range value Average range:
• {(prior average range * 13) + current range} / 14
The period is 14, so the average true range can be calculated by multiplying the previous average true range value by 13, adding the latest true range, and dividing it by the period. This calculation is quite complex and is only provided to illustrate the indicator’s mechanics. Therefore, if you’re not comfortable with mathematics, you don’t need to understand it. Your primary focus should be on applying the indicator to a chart. In essence, you need to learn how to interpret the indicator and select appropriate values for the period and multiplier parameters. I’ve prepared an image to explain the indicator formula for you.

## How to trade with it ?

The super trend indicator MT4 strategy displays two trends:
• uptrends
• downtrends
These trends help investors distinguish between buy and sell signals. Initially, look for buy and sell signals when the indicator starts moving in either direction, above or below the closing price. Consequently, a buy signal occurs when the Supertrend indicator MT5 line falls below the bar’s closing price, and a sell signal occurs when the indicator closes above the bar’s closing price. Subsequently, mark these signals on the chart by the color change of the uptrends and downtrends. When the color changes to green, it’s a buy signal, while when it changes to red, it’s a sell signal.

### Example

• Set stop loss: If you are taking a long position, you can place a stop-loss order below the green line. When prices drop below and exceed the red line, it indicates a potential reversal to a short position. In such cases, you can place a stop-loss order below the red line. Effectively utilizing the Supertrend indicator in conjunction with stop-loss orders is a valuable strategy for enhancing your trading success.
• Support and resistance: The Supertrend indicator provides traders with valuable support levels during uptrends and resistance levels during downtrends. These levels serve as crucial reference points for identifying potential entry and exit points for trades.

The Supertrend indicator for MT4 is a user-friendly tool that helps investors gain a deeper understanding of the Forex market by clearly displaying buy and sell signals on the MetaTrader 4 chart.

This image, taken from MetaTrader 4, illustrates the various buy and sell signals generated by the Supertrend indicator MT4. My annotations are highlighted in white. You can download the Super Trend Indicator for Metatrader 4 through the Finansya APP.

The Supertrend indicator for MT5 is depicted in the following MetaTrader 5 chart. It consists of two lines: a green line representing an uptrend and a red line representing a downtrend. These lines provide clear visual cues for identifying buy and sell signals.

• Highly user-friendly and straightforward to understand.
• Freely available on various trading platforms.
• Generates accurate forex signals.
• Excels in identifying trends within the forex and cryptocurrency markets.

• The Supertrend Indicator can provide misleading signals during periods of consolidation or “trading ranges”.
• Not suitable for all trading scenarios.
• May struggle in volatile markets. Therefore, traders should first identify the prevailing trend before employing this indicator.
• Prone to delays in trend reversals, making it challenging to capture extreme market movements. Consequently, it’s recommended to combine it with other indicators, such as the primary trend or RSI, for a more comprehensive analysis.

### Conclusion

The supertrend indicator which can be utilized in Tradingview is one of the most important tools that every Forex and crypto trader should know to improve their results and gain wealth. But is more important to know how to use it to be useful when combine with he the Traders Dynamic Index.