Introduction to the Super Signals Channel Indicator
Price action and market flow traders typically use swing highs and swing lows in order to make a sense of the market. They would have an idea where the direction of the trend and where price may reverse using price action.
The Super Signals Channel indicator is an indicator which can be used to observe price action since it is based on swing highs and swing lows.
What is the Super Signals Channel Indicator?
The Super Signals Channel indicator is a custom technical indicator which a combination of a channel-based indicator and reversal signal indicator.
It plots two lines, a red line above price action and a lime line below price action. These two lines envelopes price action forming a channel-like structure.
It also plots arrows indicating a reversal signal. It plots a lime arrow pointing up to indicate a bullish reversal, and a red arrow pointing down to indicate a bearish reversal.
How the Super Signals Channel Indicator Works?
The Super Signals Channel indicator plots its channel like structure just like a Donchian Channel would. However, it shifts its plotting of the line in a way that the highest high or lowest low, which would be the basis of the extremes of the channel would be in the middle of the newly formed extreme of the channel.
It also plots its arrows on the highest high or lowest low which it used as a basis for the extremes of the channel.
How to use the Super Signals Channel Indicator for MT4
The Super Signals Channel indicator has two variables which can be tweaked.
The “Signal Gap” variable allows traders to tweak the sensitivity of the indicator. The value on this variable is the number of bars that would be needed before the indicator would detect a new reversal signal. The higher the number, the lower the sensitivity and the more reliable the indicator is. The lower the number, the higher the sensitivity, yet the signals it produces would not be as reliable.
“Show Bars” is just the number of bars it would work back to identify historical signals.
This indicator can be used to identify trend direction based on the trajectory of the channel. A rising channel indicates an uptrend, while a falling channel indicates a downtrend.
The signals can also be used as a basis to open trades provided that it coincides with a price rejection of a prior price extreme.
Buy Trade Setup
When to Enter?
Identify a swing low based on a prior reversal signal. Enter a buy order as soon as a lime arrow pointing up appears in confluence with a bullish reversal pattern. Set the stop loss below the pattern.
When to Exit?
Set the take profit target on the next swing high based on a prior arrow pointing down.
Sell Trade Setup
When to Enter?
Identify a swing high based on a prior reversal signal. Enter a sell order as soon as a lime arrow pointing down appears in confluence with a bearish reversal pattern. Set the stop loss above the pattern.
When to Exit?
Set the take profit target on the next swing low based on a prior arrow pointing up.
Conclusion
The Super Signals Channel indicator can be a useful technical indicator if used correctly. It should not be blindly followed based on its signals. Instead, traders should use it to make a sense of the market structure and trade according to the market structure.
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