Supertrend Momentum Entries with Volume and SMA Filters
Summary
This strategy seeks frequent long and short trades in volatile, active stocks. It enters when the ATR-based Supertrend changes direction, subject to optional confirmation from volume above its recent average and price relative to a simple moving average. The documented defaults use a 10-period ATR, a 2.0 Supertrend multiplier, a 20-period volume average with a 1.2 multiplier, and a 50-period SMA.
Positions have percentage-based profit targets and stop losses, with optional exits when Supertrend reverses. The script can take either direction and sizes entries as a percentage of equity. Its description suggests penny stocks and other high-volatility instruments, while advising review of backtests and attention to liquidity risk. The document provides rules and source code but no backtest results, sample, or comparison showing that the filters improve returns. Actual results may depend on instrument liquidity, trading costs, and parameter choices.
Key ideas
- A Supertrend direction change triggers a potential entry in the corresponding direction.
- Optional filters require elevated volume and price above or below a moving average for long or short trades.
- Percentage-based targets and stops can be supplemented with exits on a Supertrend reversal.
- The strategy is designed for frequent trading in volatile stocks, but the document reports no performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.