Trend: SuperTrend, Parabolic SAR and Ichimoku
Three trend-following indicators, and where they suggest questioning the trend.
Beyond the averages, three classics that follow the trend and help you manage where direction sits and when it changes.
SuperTrend
Draws a line that sits below price when the trend is up and above it when the trend is down, switching sides when the market turns.
- How to read it: price above the line = uptrend; the line “jumping” to the other side signals the change in direction. Often used as a dynamic stop.
- Parameters: period and multiplier (higher = less sensitive).
Parabolic SAR
A series of dots that move along with price and “flip” when the trend reverses.
- How to read it: dots below price = bullish phase, above = bearish.
- Parameters: step and maximum step (they set how fast the dots “chase” price).
Ichimoku
A complete system that shows trend, support/resistance and momentum in one go, with its characteristic “cloud”.
- How to read it: price above the cloud = bullish context, below = bearish, inside = unclear. The thickness of the cloud indicates strength.
- Parameters: the periods of its components (the classic settings are fine in most cases).