The Supertrend Technical Tool and its navigation in the Crypto market.

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As a crypto Trader, it is always advisable to trade with trends especially if you are a retail Trader. Threading according to trends helps you have this insight into the movements of the market and its current situation.

There are technical analysis tools that can actually help you determine the trends in the market and this technical analysis tool is supertrend indicator which is an indicator that helps to identify these markets situations.

This super trend indicator is a trend following indicator that helps us identify trends, buy and sell signals used in trading in the market. This indicator gives you these signals with varying trends direction which are shown using the candlesticks of red and green.

When a price is below this indicator, it shows the market is in a downtrend and beats indicator will change to a red color. When the price is above this supertrend indicator, it shows a bullish trend with a green indicator color.

The absence of a market that is trending will make the indicator flat which means the price of an asset is ranging and this indicator thus help in serving as a support level and resistance when price of an asset is in an uptrend or a downtrend.

These indicators are gotten from mathematical model of price points and it is calculated using the average values of the red and green candlesticks. This indicator calculates the price volatility by bringing the average true range in its calculation.

The average true range which acts as the period and the multiplier as factor are sensitive parameters of this indicator which when changed affects the signal from the indicator. This average true range length is used to determine the length of the period put into consideration. The longer the period, the more accurate signal from the supertrend indicator.

The default values of these average trend indicator is 10 and that of the factor which serves as the multiplier has a default factor of 3. The values can be modified and the average true range parameters uh very important to the indicator as it is used to measure the indicator value as well as the price of volatility.

The parameters involved are the period which is the average true length and the factor which is the multiplier. To calculate the uptrend of this indicator, the mathematical formula is used = Uptrend = High+ Low price/2 + Factor (Multiplier) × Period (ATR) .

For downtrend it is a subtraction of the above.

Downtrend= (High + Low) / 2 - Factor (Multiplier) × Period (ATR). Adding a multiple of the volatility price determines the uptrend. To get these average true range, we need to calculate the true range gotten from the highest. The Average true range is calculated by taking the simple moving average of the true range using the default value for the period which is 10. It's stated in the formula

ATR = Maximum True range / 14. To get the current ATR, you'll use the formula = Previous ATR (n-1) + Current true range divided by n which is number of periods i.e the candles considered. The main parameters of this indicator is the period ( ATR length) and the factor which is the multiplier.

The ATR is added into the calculations to determine the volatility of price in it's value and the multiplier on the other hand has a default setting of 3 which determines the sensitivity of the supertrend indicator to the current price when multiplied by this ATR. Shorter indicator periods makes price reactive as there are no much price data to be considered.

As a trader, you must review your trading style and also check the efficiency of the indicator using various multipliers as the indicator's default setting may not be considered as the best.

All screenshots are from my trading view and binance account

Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have