This trading strategy uses a triple confirmation system to identify strong trends. It combines three different Supertrend indicators with a long-term 233 EMA to filter for entries. A long position is only considered when all three Supertrends are bullish and above the EMA, with the exit managed by an ATR-based trailing stop loss.
To trade this strategy manually :
First, add these four indicators to your TradingView chart:
- Exponential Moving Average (EMA): Set the length to 233.
- Supertrend 1: Set ATR Length to 10 and Factor to 1.
- Supertrend 2: Set ATR Length to 11 and Factor to 2.
- Supertrend 3: Set ATR Length to 12 and Factor to 3.
Long Entry Condition:
Enter a long trade at the close of the candle when BOTH of these conditions are met:
- All three Supertrend lines are plotted above the 233 EMA line.
- All three Supertrend indicators turn green, signaling an uptrend.
Long Exit Condition (Trailing Stop Loss):
This strategy uses a trailing stop based on the Average True Range (ATR). You will need the ATR indicator with a length of 26 for this.
- Initial Stop Loss: When you enter the trade, calculate your stop loss as: `Entry Price - (ATR value * 2)`.
- Trailing the Stop: At the close of each new candle, calculate a new potential stop level: `Current Close Price - (ATR value * 2)`. If this new level is HIGHER than your previous stop loss, move your stop up to the new level. If it is lower, do nothing and keep your stop where it is.
- Exit: You are stopped out and exit the trade when the price hits your trailing stop loss.
For Short Trades:
You would reverse the conditions:
- Entry: All three Supertrend lines are below the 233 EMA, and all three Supertrends turn red.
- Exit: Set an initial stop at `Entry Price + (ATR value * 2)` and trail it downwards as the price falls.
To potentially improve performance, consider taking partial profits when the fastest Supertrend (10, 1) flips against your trade direction. Then, let the remainder of your position run with the original ATR trailing stop loss rule. You can also experiment with the entry trigger, for instance, by entering when only two of the three Supertrends confirm the trend, which may allow for earlier entries at the cost of more false signals.