Again on Supertrend...

First of all, a brief resume of all posts of this blog in Supertrend (tracing back):

1. Use of indicators in Trading System (last update) - September 2, 2011 - http://www.fergo.co/2011/03/uso-del-supertrend-un-riassunto-using.html

Supetrend (0.85, 10): It is dangerous to open positions in contrast to it, but the assessment of levels with moving average (20, 10) can be very useful for tracing evaluation. Ok to use stop-loss

 

2. Using Supertrend: a summary - March 2, 2011 - http://www.fergo.co/2011/03/uso-del-supertrend-un-riassunto-using.html 

A closure of Supetrend after a considerable distance in time either relative to the last cross vortex / random walk / etc could also be a good signal to close and "turn" the portfolio.

However, this tactic is very dangerous because in different periods, a trending period lasts more than two months and therefore would be constantly open positions at a loss (*)

…

FOR YOUR SAFETY: Rate this CUTS TO TRACING THE PATH OF THE MOVING AVERAGE TO 20 DAYS!

 

3. Supertrend and extreme values of Vortex - Random Walk - RSI - DI  - December 7, 2010 - http://www.fergo.co/2010/12/supertrend-and-extreme-values-of-vortex.html

A cross in Supertrend during a period of extreme values of the indicator in object seems to give good signal for entering a positing (not only for closing)


ONLY IF IN TOUCHING NOT AFTER A LITTLE THROWBACK!!!!
(in second hypothesis you can hold the position!)

[my comment now]:  this is, indeed, what explained better in the post of March 2, 2011]

 

4. Note about correct use of Supertrend for closing (opening) positions  - December 20, 2010 - http://www.fergo.co/2010/12/note-about-correct-use-of-supertrend.html

No mentions of the post given here, since points 2 and 3 are explanatory enough

 

5. Ricordando...l'uso del supertrend (remembering …the use of supertrend) January 14, 2011 - http://www.fergo.co/2011/01/ricordandoluso-del-supertrend.html

The SUPERTREND bean alarm bell, but not an absolute method to close positions.
Close only if they have passed a number of bars(you can think of a satisfactory take profit)

 

(**) After all these discussions, still valid, please be very careful in closing and opening position with supertrend, and expecially in reversing the position of your portfolio.

There have been many cases such as represented below, where market gives a rapid and heavy throwback, but it lasts just one day

For the graph: see half of July, end of November and today (Supertrend now negative, but today’s Stock Exchange has closed positive) We will see tomorrow what will happen…

In general, these bad signal are unusual (otherwise, we will reject the indicator), but there are!

Any source