SuperTrend Oscillator

The SuperTrend Oscillator tool measures the distance between the closing price and the SuperTrend line, providing a momentum-based perspective on trend strength and potential reversals. By normalizing the SuperTrend calculation into an oscillator format, it allows traders to identify overextensions and trend shifts more clearly than standard price overlays.

Usage

The SuperTrend Oscillator is used to identify the prevailing trend direction and the intensity of price movement relative to trend support or resistance levels.

• Trend Direction: The oscillator plots a green area when price is above the SuperTrend level (uptrend) and a red area when price is below it (downtrend).
• Warning Signals: When the oscillator area contracts toward the zero line, specific "warning bars" of the opposite color may appear. These suggest that the current trend is weakening and a reversal or "trend flip" may be imminent.
• Overextension: New highs or lows in the oscillator (internal peaks) can signal an overextended trend, suggesting a potential pullback or a more conservative exit point for existing trades.
• Reversals: A cross of the zero line indicates a SuperTrend flip. These flips often coincide with large price candles and a shift in market sentiment.

Details

The indicator calculates the spread between the current close and the SuperTrend value, similar to how a Commodity Channel Index (CCI) measures the distance between price and a moving average. This implementation typically utilizes a 14-period SuperTrend. The oscillator also includes a "Warning Range" calculation based on a Simple Moving Average of the True Range, which helps filter price action and highlight when the spread is narrowing significantly enough to warrant a reversal warning.

Settings

• Use Custom Resolution?: Enables the indicator to calculate data from a different timeframe than the current chart.
• Custom Resolution: Sets the specific timeframe (e.g., Daily, Weekly) used if the custom resolution toggle is active.
• Length Of Warning Range: Determines the period for the True Range moving average used to identify warning bars.
• SuperTrend Length: The lookback period used for the ATR calculation within the SuperTrend formula.
• SuperTrend Multiple: The multiplier applied to the ATR to determine the distance of the SuperTrend line from price.

FAQ

How do I interpret the histogram colors?

The main area color represents the current trend (Green for bullish, Red for bearish). Brightly colored histogram bars of the opposite color within an area serve as warnings that the trend is contracting and may soon flip.

Can I use this for multi-timeframe analysis?

Yes, by using the "Custom Resolution" settings, you can plot a Daily or Weekly SuperTrend Oscillator on a lower timeframe chart to align your entries with the higher-timeframe trend.

How can I access the SuperTrend Oscillator?

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