Volume-Weighted Supertrend with Volume Trend Confirmation

Summary

This strategy modifies Supertrend by centering its volatility bands on a rolling volume-weighted average price instead of a conventional price source. ATR determines the band offset, while the bands are carried forward under Supertrend-style rules to identify direction changes. A second Supertrend is calculated from volume itself and acts as a confirmation filter for the price-based signal.

The script opens long entries when the price and volume trends align upward, and closes the long position under its sell conditions when the trend indications weaken or reverse. The author describes adjustable source, volume and ATR lengths, and an ATR multiplier; the stated example uses equity-based sizing, pyramiding, and commissions. No stop loss is included, and the document recommends adding risk controls suited to the trader. It says the approach is intended for trending, high-volume assets and may be less effective on lower timeframes. No quantified results are provided here, so performance should not be inferred from the strategy description.

Key ideas

• The price Supertrend uses a rolling volume-weighted average as its center and ATR-scaled bands.
• A Supertrend calculated from volume supplies a second trend signal for confirmation.
• Long entries and exits depend on changes in the alignment of price and volume trends.
• The strategy does not include stops, and the document provides no quantified performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.