The SuperTrend Indicator in Python — Coding and Back-Testing Its Strategy
How to code it, back-test it, and evaluate it on FX Trading
This rare gem is a trend-following indicator that can be used either as a trading system or as a way to place your stops. We will introduce the intuition of the SuperTrend indicator, code it in Python, back-test a few strategies, and present our conclusion. Of course, just like any other indicator, the SuperTrend can find its place within a bigger trading system but not take over the whole decision-making process.
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Building Blocks
The first concept we should understand before creating the SuperTrend indicator is volatility. We sometimes measure volatility using the Average True Range. Although the ATR is considered a lagging indicator, it gives some insights as to…
