High/Low Supertrend

The High/Low Supertrend indicator provides a trend-following logic that utilizes an ATR derived from the highest and lowest points within a specific lookback range to reduce false breakouts.

Usage

The High/Low Supertrend can be used to identify trend direction and potential reversal points. Due to its construction, it is less susceptible to market noise compared to the standard Supertrend.

• Trend Identification: When the price is above the green line, the market is considered to be in an uptrend. When the price is below the red line, it is considered to be in a downtrend.
• Arming Mechanism: It is recommended to use this tool as an "arming" mechanism rather than a direct entry trigger. In ranging markets, the script may flip at the current highs or lows; therefore, combining it with other momentum or volume indicators can help confirm valid entries.
• Calculation Source: Users can toggle between using "Highs/Lows" or "Open/Close" for the volatility calculation, allowing the indicator to focus on extreme price wick values or more conservative body values.

Details

Unlike the standard Supertrend which typically uses the current bar's True Range, this version calculates its internal ATR based on the maximum and minimum price boundaries found within the ATR Length period. By calculating the True Range relative to these local extremes, the resulting bands become more robust against minor price fluctuations that do not represent a significant change in market structure.

Settings

Main Settings

• ATR Length: Determines the lookback period used to find the highest and lowest price points for the volatility calculation.
• Factor: The multiplier applied to the calculated ATR to determine the distance of the Supertrend bands from the price.
• Calculation Source: Defines whether the script uses "Highs/Lows" (wicks) or "Open/Close" (bodies) to determine the volatility range.

Visual Settings

• Enable Highlighting: Toggles the background color fill between the price and the Supertrend line.
• Show Labels: Toggles the visibility of "Buy" and "Sell" labels upon trend flips.

FAQ

How do I use the High/Low Supertrend effectively?

It is best used to filter trend direction. Traders often look for the Supertrend to flip to a bullish state to "arm" their long bias, then use a secondary trigger for the actual entry.

What is the difference between "Highs/Lows" and "Open/Close" sources?

The "Highs/Lows" option uses the extreme wicks, making the calculation sensitive to total volatility. The "Open/Close" option focuses on where the majority of trading occurred, which can sometimes provide smoother results during high-volatility spikes.

How can I access the High/Low Supertrend?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.