MTF Fusion - SuperTrend [TradingIndicators]
SuperTrend is undoubtedly one of the most popular and influential indicators ever developed, and by combining it with our MTF Fusion algorithm, we believe we have made it more useful and powerful than ever with MTF Fusion SuperTrend.
Let's start with a brief review of what the original SuperTrend indicator is and how it works.
What is SuperTrend?
The SuperTrend indicator is a popular technical analysis tool used in financial markets to identify the direction of a trend and potential entry and exit points for trading. It was developed by Olivier Seban, a French trader, and first introduced in his book "Tout le monde peut gagner en bourse" ("Everyone Can Win in the Stock Market") published in 2008.
SuperTrend is based on the concept of Average True Range (ATR) and uses two parameters: the multiplier and the period. The ATR measures the volatility of a financial instrument, and the SuperTrend indicator utilizes this information to plot a line above or below the price chart. It is an 'AITM' (Always In The Market) indicator, which, in its original form, is always 'long' or 'short' - and never 'flat'.
Here's a brief overview of how the SuperTrend indicator works:
Calculation of the ATR: The ATR is calculated using historical price data over a specified period. It measures the average range between high and low prices, reflecting the market's volatility.
Calculation of the upward (long/bullish) and downward (short/bearish) SuperTrend lines: The SuperTrend indicator multiplies the ATR by a specified multiplier (typically 2 or 3) and adds/subtracts the result from the current closing price. This calculation determines the upward and downward SuperTrend lines.
Plotting the Indicator: The SuperTrend indicator plots a line above the price chart when the price is trending upwards, and below the price chart when the price is trending downwards. The distance between the price and the indicator line provides insights into the strength of the trend.
Traders commonly use the SuperTrend indicator to identify potential buy or sell signals. For example, a buy signal may be generated when the price crosses above the indicator line, indicating an uptrend. Conversely, a sell signal may be triggered when the price crosses below the indicator line, signaling a downtrend.
What is MTF Fusion?
Multi-Timeframe (MTF) Fusion is the process of combining calculations from multiple timeframes higher than the chart's into one 'fused' value or indicator. It is based on the idea that integrating data from higher timeframes can help us to better identify short-term trading opportunities within the context of long-term market trends.
How does it work?
Let's use the context of this indicator, which calculates SuperTrend lines, as an example to explain how MTF Fusion works and how you can perform it yourself.
Step 1: Selecting Higher Timeframes
The first step is to determine the appropriate higher timeframes to use for the fusion calculation. These timeframes should typically be chosen based on their ability to provide meaningful price levels and action which actively affect the price action of the smaller timeframe you're focused on. For example, if you are trading the 5 minute chart, you might select the 15 minute, 30 minute, and hourly timeframe as the higher timeframes you want to fuse in order to give you a more holistic view of the trends and action affecting you on the 5 minute. In this indicator, four higher timeframes are automatically selected depending on the timeframe of the chart it is applied to.
Step 2: Gathering Data and Calculations
Once the higher timeframes are identified, the next step is to calculate the data from these higher timeframes that will be used to calculate your fused values. In this indicator, for example, the values of SuperTrend lines are calculated by determining the value of the SuperTrend indicator for all four higher timeframes.
Step 3: Fusing the Values From Higher Timeframes
The next step is to actually combine the values from these higher timeframes to obtain your 'fused' indicator values. The simplest approach to this is to simply average them. If you have calculated the value of a SuperTrend line from three higher timeframes, you can, for example, calculate your 'multi-timeframe fused level' as (HigherTF_SuperTrend_1 + HigherTF_SuperTrend_2 + HigherTF_SuperTrend_3) / 3.0.
Step 4: Visualization and Interpretation
Once the calculations are complete, the resulting fused indicator values are plotted on the chart. These values reflect the fusion of data from the multiple higher timeframes, giving a broader perspective on the market's behavior and potentially valuable insights without the need to manually consider values from each higher timeframe yourself.
What makes this script unique? Why is it closed source?
While the process described above is fairly unique and sounds simple, the truly important key lies in determining which higher timeframes to fuse together, and how to weight their values when calculating the fused end result in such a way that best leverages their relationship for useful TA.
This MTF Fusion indicator employs a smart, adaptive algorithm which automatically selects appropriate higher timeframes to use in fusion calculations depending on the timeframe of the chart it is applied to. It also uses a dynamic algorithm to adjust and weight the SuperTrend calculations depending on each higher timeframe's relationship to the chart timeframe. These algorithms are based on extensive testing and are the reason behind this script's closed source status.
Unlike in the original indicator, flat/'No Trend' areas exist in MTF Fusion SuperTrend!
MTF Fusion SuperTrend only shows a Fusion SuperTrend when the majority of SuperTrends from higher timeframes are in agreement and signaling the same trend direction. So, unlike the original SuperTrend indicator, MTF Fusion SuperTrend sometimes shows no SuperTrend line at all - typically in flat or indecisive areas, which we think is beneficial and helps to filter out noise on smaller timeframes.
Included Features
Options
Let's start with a brief review of what the original SuperTrend indicator is and how it works.
What is SuperTrend?
The SuperTrend indicator is a popular technical analysis tool used in financial markets to identify the direction of a trend and potential entry and exit points for trading. It was developed by Olivier Seban, a French trader, and first introduced in his book "Tout le monde peut gagner en bourse" ("Everyone Can Win in the Stock Market") published in 2008.
SuperTrend is based on the concept of Average True Range (ATR) and uses two parameters: the multiplier and the period. The ATR measures the volatility of a financial instrument, and the SuperTrend indicator utilizes this information to plot a line above or below the price chart. It is an 'AITM' (Always In The Market) indicator, which, in its original form, is always 'long' or 'short' - and never 'flat'.
Here's a brief overview of how the SuperTrend indicator works:
Calculation of the ATR: The ATR is calculated using historical price data over a specified period. It measures the average range between high and low prices, reflecting the market's volatility.
Calculation of the upward (long/bullish) and downward (short/bearish) SuperTrend lines: The SuperTrend indicator multiplies the ATR by a specified multiplier (typically 2 or 3) and adds/subtracts the result from the current closing price. This calculation determines the upward and downward SuperTrend lines.
Plotting the Indicator: The SuperTrend indicator plots a line above the price chart when the price is trending upwards, and below the price chart when the price is trending downwards. The distance between the price and the indicator line provides insights into the strength of the trend.
Traders commonly use the SuperTrend indicator to identify potential buy or sell signals. For example, a buy signal may be generated when the price crosses above the indicator line, indicating an uptrend. Conversely, a sell signal may be triggered when the price crosses below the indicator line, signaling a downtrend.
What is MTF Fusion?
Multi-Timeframe (MTF) Fusion is the process of combining calculations from multiple timeframes higher than the chart's into one 'fused' value or indicator. It is based on the idea that integrating data from higher timeframes can help us to better identify short-term trading opportunities within the context of long-term market trends.
How does it work?
Let's use the context of this indicator, which calculates SuperTrend lines, as an example to explain how MTF Fusion works and how you can perform it yourself.
Step 1: Selecting Higher Timeframes
The first step is to determine the appropriate higher timeframes to use for the fusion calculation. These timeframes should typically be chosen based on their ability to provide meaningful price levels and action which actively affect the price action of the smaller timeframe you're focused on. For example, if you are trading the 5 minute chart, you might select the 15 minute, 30 minute, and hourly timeframe as the higher timeframes you want to fuse in order to give you a more holistic view of the trends and action affecting you on the 5 minute. In this indicator, four higher timeframes are automatically selected depending on the timeframe of the chart it is applied to.
Step 2: Gathering Data and Calculations
Once the higher timeframes are identified, the next step is to calculate the data from these higher timeframes that will be used to calculate your fused values. In this indicator, for example, the values of SuperTrend lines are calculated by determining the value of the SuperTrend indicator for all four higher timeframes.
Step 3: Fusing the Values From Higher Timeframes
The next step is to actually combine the values from these higher timeframes to obtain your 'fused' indicator values. The simplest approach to this is to simply average them. If you have calculated the value of a SuperTrend line from three higher timeframes, you can, for example, calculate your 'multi-timeframe fused level' as (HigherTF_SuperTrend_1 + HigherTF_SuperTrend_2 + HigherTF_SuperTrend_3) / 3.0.
Step 4: Visualization and Interpretation
Once the calculations are complete, the resulting fused indicator values are plotted on the chart. These values reflect the fusion of data from the multiple higher timeframes, giving a broader perspective on the market's behavior and potentially valuable insights without the need to manually consider values from each higher timeframe yourself.
What makes this script unique? Why is it closed source?
While the process described above is fairly unique and sounds simple, the truly important key lies in determining which higher timeframes to fuse together, and how to weight their values when calculating the fused end result in such a way that best leverages their relationship for useful TA.
This MTF Fusion indicator employs a smart, adaptive algorithm which automatically selects appropriate higher timeframes to use in fusion calculations depending on the timeframe of the chart it is applied to. It also uses a dynamic algorithm to adjust and weight the SuperTrend calculations depending on each higher timeframe's relationship to the chart timeframe. These algorithms are based on extensive testing and are the reason behind this script's closed source status.
Unlike in the original indicator, flat/'No Trend' areas exist in MTF Fusion SuperTrend!
MTF Fusion SuperTrend only shows a Fusion SuperTrend when the majority of SuperTrends from higher timeframes are in agreement and signaling the same trend direction. So, unlike the original SuperTrend indicator, MTF Fusion SuperTrend sometimes shows no SuperTrend line at all - typically in flat or indecisive areas, which we think is beneficial and helps to filter out noise on smaller timeframes.
Included Features
- Fusion SuperTrend lines
- Dynamic Multi-Timeframe SuperTrends
- Filled zones to highlight trends
- Full customization of SuperTrend parameters
- Pre-built color stylings
Options
- Fusion View: Show/hide the Fusion SuperTrends calculated from multiple higher timeframes
- MTF View: Show/hide the SuperTrends from multiple higher timeframes used to calculate the Fusion SuperTrends
- Fill Trending Zones: Show/hide the fill for 'trending zones' between price and the Fusion SuperTrends
- Multiplier: Sets the multiplier for all SuperTrend calculations
- ATR Period: Sets the ATR period for all SuperTrend calculations
- Pre-Built Color Styles: Use a pre-built color styling (uncheck to use your own colors)
- Manual Color Styles: When pre-built color styles are disabled, use these color inputs to define your own