Using three Supertrend indicators in combination with the 200 Exponential Moving Average (EMA) provides a multi-timeframe confirmation strategy that enhances both trend-following and entry precision.
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The Supertrend indicator, derived from average true range (ATR), excels at filtering noise and identifying clear directional movement. By layering three Supertrends with varying ATR multipliers and periods—such as (7,3), (10,4), and (14,5)—traders can capture short-, medium-, and long-term momentum shifts within a single chart setup. This stacking approach allows for better confirmation and reduces the chance of false signals, particularly in volatile or choppy markets.
The 200 EMA serves as a powerful trend filter, often considered the “line in the sand” between bullish and bearish market phases. When price is above the 200 EMA, traders typically seek long setups, while short setups are favored below it. Combining the 200 EMA with Supertrend confirmation gives traders a rule-based framework to avoid counter-trend trades and remain aligned with dominant market direction. For example, if all three Supertrends flip green while price is also trading above the 200 EMA, it suggests a strong bullish bias worthy of entering a long position.
This strategy is particularly effective on higher timeframes like the 1-hour or 4-hour chart, where noise is reduced and signals carry more weight. It also performs well across trending assets such as forex majors, indices, and cryptocurrencies. Entries can be fine-tuned with candlestick patterns or additional tools like RSI or volume spikes for added confirmation. Overall, this multi-layered approach provides a systematic and visually intuitive method for capturing high-probability trades while managing risk with greater confidence.
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Money Management:
If you have $100 in your account, each open position should be $5 tops
If you have $200 in your account, each open position should be $10 tops
If you have $500 in your account, each open position should be $25 tops
If you have $1,000 in your account, each open position should be $50 tops
If you have $2,000 in your account, each open position should be $100 tops
If you have $5,000 in your account, each open position should be $250 tops
We're currently in our 13th year helping traders become successful in the live markets so we know a thing or two about leveraging a small account into serious wins.
Risk Disclaimer:
Trading options involves financial risk and may not be appropriate for all investors. The information presented here is for information and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument. Any trading decisions that you make are solely your responsibility. Past performance is not necessarily indicative of future results.
