The Supertrend indicator, when combined with the MACD (Moving Average Convergence Divergence) and the Commodity Channel Index (CCI), creates a powerful trading system that helps traders identify trend direction, momentum, and potential entry or exit points. The Supertrend works as a dynamic support and resistance tool, adjusting with price action to show whether the market is in a bullish or bearish phase. Traders often use the Supertrend to stay aligned with the prevailing trend and avoid getting caught in false signals during choppy market conditions.
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The MACD indicator enhances this strategy by measuring momentum and identifying potential reversals through the relationship between two moving averages. When the MACD line crosses above the signal line in alignment with a bullish Supertrend, traders gain higher confidence in long positions. Conversely, bearish crossovers paired with a downward Supertrend provide strong sell confirmations. This synergy helps reduce noise in the market and gives clearer trade setups with improved accuracy.
The Commodity Channel Index (CCI) adds another layer of confirmation by identifying overbought and oversold conditions. When CCI moves above +100, it suggests strong bullish momentum, while a drop below -100 signals bearish momentum. Traders often look for CCI to confirm the signals given by the Supertrend and MACD, ensuring trades are taken at optimal points with reduced risk. By combining these three indicators—Supertrend for trend direction, MACD for momentum, and CCI for entry timing—traders can build a robust and reliable trading strategy suitable for both short-term and swing trading styles.
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Money Management:
It is important to follow up with this strict rule of investment:
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.
