It usually starts quietly. You see a headline. You hear a warning. You notice a shift in sentiment. Maybe inflation is rising, geopolitical tension is building, or a market commentator is warning that the next major decline is close. You look at the charts. You look at the indicators. You look at the macro picture. The market feels stretched. Prices seem too high. The ...
Many traders rely on trend-following tools like the SuperTrend to manage their entries and trailing stops. The SuperTrend is undeniably effective at keeping traders in prolonged moves, but it suffers from being mathematically rigid. A standard SuperTrend multiplies the Average True Range (ATR) by a fixed constant (for example, 3.0) to trail the price. It does not care if momentum is accelerating effortlessly or if a reversal is imminent; it blindly maintains its fixed distance until the price ...