QLT Supertrend Flags

QLT Supertrend Flags

Description of the "QLT Supertrend Flags" indicator

📊 Basic Concept
This is an expanded version of the classic Supertrend indicator with a system of confirmed signals. The indicator helps identify trend reversals with additional filtering of false signals through various confirmation methods.

Key Features
1. Improved Supertrend with an adaptive multiplier
- Basic trend calculation based on ATR (Average True Range)
- Dynamic ATR multiplier option to adapt to changing volatility
- Colored trend line (green = bullish, red = bearish)

2. Signal Confirmation System
4 methods for confirming trend reversals:
- Time - the signal is confirmed N bars after the reversal
- Price - the price must move away from the Supertrend line by a specified % of ATR
- Volume - confirmation by increased volume
- Indicator - confirmation by another indicator

3. Process Visualization
- Confirmation Zone - highlights the period between the reversal and confirmation
- Flags - clear buy (B) and sell (S) signals
- Distance - displays the distance from the price to the Supertrend line in ATR units

Indicator Settings
Supertrend Main Parameters:
1. Source - price for calculation (HL2 by default)
2. ATR Length - Volatility calculation period (14 recommended)
3. Base ATR Multiplier - Channel width (3.0 recommended)

Dynamic Multiplier:
- Enable adaptive multiplier that changes with volatility
- Volatility Estimation Period - Sensitivity setting

Confirmation Method:
1. Bars - N-bar delay (conservative approach)
2. Price - % price deviation from ATR (active approach)
3. Volume - Volume spike (confirmation of interest)
4. Indicator - Confirmation by another indicator (e.g., RSI, MACD)

Visual Settings:
- Flag size (Tiny, Small, Normal, Large)
- Colors for bullish/bearish signals
- Trendline thickness
- Display statistics and distance

How to use in trading
Buy signals:
1. Reversal of a bullish trend - the Supertrend line changes color from red to green
2. Confirmation** - according to the selected method (time delay, price deviation, etc.)
3. "B" flag - appears below the bar, signaling a buy signal
4. Take profit - at the next resistance level or the distance to the line

Sell signals:
1. Reversal to a bearish trend - the line changes color from green to red
2. Confirmation - similar to a bullish signal
3. "S" flag - appears above the bar, signaling a sell signal
4. Take profit - at the next support level

Risk management:
- Stop loss - behind the Supertrend line (stop level)
- Distance - the greater the distance from the price to the line, the greater the potential for movement
- Confirmation zone - avoid entry until full confirmation

Interpretation of elements
Supertrend line:
- Green - bullish trend, buy on pullbacks to the line
- Red - bearish trend, sell on Rebounds to the line

Flags:
- "B" (green) - confirmed buy signal
- "S" (red) - confirmed sell signal

Confirmation zone (blue fill):
- Period between the initial reversal and confirmation
- Avoid entries in this zone

Distance (histogram/fill):
- > +2 ATR - strong upward deviation (possible correction)
- +1 to +2 ATR - moderate bullish deviation
- -1 to +1 ATR - neutral zone
- -1 to -2 ATR - moderate bearish deviation
- < -2 ATR - strong downward deviation (possible rebound)

Trading strategies
Strategy 1: Conservative (temporary confirmation)
- Settings: confirmation after 2-3 bars
- Advantage: minimal number of false signals
- Disadvantage: lag Entry

Strategy 2: Active (price confirmation)
- Settings: Confirmation when the price moves 1-2% from the ATR
- Advantage: Early entry into a trend
- Disadvantage: More false signals

Strategy 3: Synthetic (volume + indicator)
- Settings: Volume and RSI/MACD confirmation
- Advantage: High accuracy
- Disadvantage: Complex setup