SuperTrend Oscillator v3

The SuperTrend Oscillator v3 indicator provides a momentum-based perspective on trend dynamics by measuring the spread between the price and the underlying SuperTrend calculation. It converts traditional price-overlay trend data into an oscillator format, helping traders identify trend strength, exhaustion points, and potential reversals through color-coded histograms and warning signals.

Usage

The SuperTrend Oscillator v3 is used to visualize the "distance" price has traveled from its trend baseline, similar to how a CCI functions.

• Trend Identification: The oscillator displays a green area for uptrends and a red area for downtrends. A crossover of the zero line indicates a trend flip.
• Warning Signals: When the oscillator area contracts toward the zero line, specific "warning" colors appear. This suggests the current trend is weakening and may be defended by bulls/bears or break entirely for a reversal.
• Overextension: Reaching new internal highs or lows within a trend area often signals an overextended market, which can serve as a conservative exit signal.
• Multi-Timeframe Analysis: By using the custom resolution settings, traders can view higher timeframe trend data (e.g., Weekly or Daily) on a lower timeframe chart to ensure they are trading in the direction of the primary trend.

Details

This version of the oscillator is based on a SuperTrend calculation (defaulting to a 14-period length). Unlike standard SuperTrend overlays that sit on the price chart, this script calculates the difference (close - SuperTrend Line) and plots it in a separate pane.

The "Warning" mechanism utilizes a Simple Moving Average (SMA) of the absolute oscillator values over a 200-period range. When the oscillator value falls below this average while price moves against the trend, warning bars are triggered. This logic highlights periods where the price is mean-reverting toward the SuperTrend level, which historically acts as a significant support or resistance zone.

Settings

• Use Custom Resolution?: Enables the ability to fetch SuperTrend data from a different timeframe than the current chart.
• Resolution: Defines the specific timeframe to use if "Use Custom Resolution" is enabled.
• Length Of Warning Range: Sets the lookback period for the SMA used to determine trend weakening/warning signals.
• SuperTrend Length: The period used for the ATR and midline calculations within the SuperTrend formula.
• SuperTrend Multiple: The multiplier applied to the ATR to determine the distance of the SuperTrend bands.
• Use Barcolors?: When enabled, the chart candles will be colored according to the oscillator's trend and warning states.

FAQ

How do I interpret the warning colors on the bars?

Warning colors appear when the spread between price and the SuperTrend is narrowing significantly. This indicates a potential trend exhaustion or a test of the trend's baseline support/resistance.

What is the advantage of using the oscillator over the standard overlay?

The oscillator makes it easier to visualize the magnitude of the trend and spot "divergences" or overextensions that aren't as obvious when looking at price bands alone.

How can I access the SuperTrend Oscillator v3?

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