Supertrend with ADX & MTF MA Filter

# **Supertrend with ADX & MTF MA Filter - Comprehensive Explanation**

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## **1. Purpose of This Indicator**
This indicator combines three powerful technical analysis tools to create a robust trading system:
✅ **Supertrend** (Trend-following)
✅ **ADX Filter** (Trend strength confirmation)
✅ **MTF MA Filter** (Multi-timeframe trend direction confirmation)

**Primary Goals:**
✔ **Identify high-probability trend reversals** with confirmation from multiple indicators
✔ **Filter out weak trends** using ADX (Average Directional Index)
✔ **Add higher timeframe context** with MTF (Multi-TimeFrame) Moving Average
✔ **Reduce false signals** by requiring confluence between all three components

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## **2. Core Logic & Components**

### **A. Supertrend (Base Indicator)**
- **Calculation:**
```pine
up = hl2 - (Multiplier * ATR(Periods))
dn = hl2 + (Multiplier * ATR(Periods))
```
- **Bullish trend** when price > `up` (green line)
- **Bearish trend** when price < `dn` (red line)

- **Why Supertrend?**
- Simple yet effective trend-following system
- Adapts to volatility via ATR (Average True Range)

---

### **B. ADX Filter (Trend Strength Confirmation)**
- **ADX Calculation:**
```pine
[adxVal, diPlus, diMinus] = calcADX(adxLength, adxSmoothing)
strongTrend = adxVal >= adxThreshold
```
- **ADX > Threshold (Default: 20)** = Strong trend
- **DI+ > DI-** = Bullish momentum
- **DI- > DI+** = Bearish momentum

- **Why ADX?**
- Avoids trading in choppy markets (low ADX = weak trend)
- Confirms if Supertrend signals occur in a strong trend

---

### **C. MTF MA Filter (Higher Timeframe Trend Alignment)**
- **Moving Average Calculation:**
```pine
[maValue, maRising, maFalling] = getMA(maSource, maLength, maType, maTF)
```
- **MA Type:** SMA, EMA, WMA, or DEMA
- **Timeframe:** Any (1m, 5m, 1H, 4H, D, W, M)
- **Trend Direction:**
- **Buy Signal:** MA must be **rising**
- **Sell Signal:** MA must be **falling**

- **Why MTF MA?**
- Aligns trades with the **higher timeframe trend**
- Reduces counter-trend entries

---

## **3. How to Use This Indicator**

### **A. Buy Conditions (All Must Be True)**
1. **Supertrend turns bullish** (price crosses above `up` line)
2. **ADX ≥ Threshold** (trend is strong)
3. **Higher timeframe MA is rising** (confirms bullish bias)

### **B. Sell Conditions (All Must Be True)**
1. **Supertrend turns bearish** (price crosses below `dn` line)
2. **ADX ≥ Threshold** (trend is strong)
3. **Higher timeframe MA is falling** (confirms bearish bias)

### **C. Recommended Settings**
| Parameter | Recommended Value | Description |
|-----------|------------------|-------------|
| **ATR Period** | 14 | Sensitivity of Supertrend |
| **Multiplier** | 1.5-3.0 | Adjust for volatility |
| **ADX Threshold** | 20-25 | Higher = stricter trend filter |
| **MA Length** | 20-50 | Smoothness of trend filter |
| **MA Timeframe** | 1H/D | Align with trading style |

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## **4. Trading Strategies**
### **A. Trend-Following Strategy**
- **Enter:** When all 3 conditions align (Supertrend + ADX + MA)
- **Exit:** When Supertrend flips or ADX drops below threshold

### **B. Pullback Strategy**
- **Wait for:**
- Supertrend in trend direction
- ADX remains strong
- MA still aligned
- **Enter:** On pullback to Supertrend line

### **C. Multi-Timeframe Confirmation**
- **Intraday traders:** Use 4H/D MA for trend bias
- **Swing traders:** Use D/W MA for trend bias

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## **5. Advantages Over Standard Supertrend**
✔ **Fewer false signals** (ADX filters weak trends)
✔ **Higher timeframe alignment** (avoids trading against larger trends)
✔ **Customizable MA types** (SMA, EMA, WMA, DEMA)
✔ **Works on all markets** (stocks, forex, crypto)

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### **Final Thoughts**
This indicator is designed for traders who want **high-confidence trend signals** by combining:
🔹 **Supertrend** (entry trigger)
🔹 **ADX** (trend strength filter)
🔹 **MTF MA** (higher timeframe trend alignment)

By requiring all three components to align, it significantly improves signal quality compared to standalone Supertrend systems.

**→ Best for:** Swing trading, trend-following, and avoiding choppy markets.