Supertrend EA: A Powerful Trend Following Robot

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The Supertrend EA is an expert advisor based on the popular Supertrend indicator. This robot trades the signals generated by the Supertrend indicator to identify and follow trends in the market. In this comprehensive review, we will take an in-depth look at how the Supertrend EA works, its key features, performance statistics, and pros and cons.

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What is the Supertrend Indicator?

The Supertrend indicator is a technical analysis tool that utilizes two parameters – the Average True Range (ATR) and a multiplier – to identify trends and provide trading signals. It appears as a moving line above or below the price bars on a chart. The colour of the line signals the direction of the trend:

Green line = Uptrend
Red line = Downtrend

When the price crosses above the Supertrend line, it generates a buy signal. When the price crosses below the line, it gives a sell signal. The indicator works well for trend trading strategies across various markets and timeframes.

How the Supertrend EA Works

The Supertrend EA enters trades based on the buy and sell signals generated by the Supertrend indicator. It uses the following logic:

Buy signal = Price closes above Supertrend line
Sell signal = Price closes below Supertrend line

Once a signal occurs, the EA places a pending order in the direction of the trend. It then manages the trade with stop loss and take profit based on the ATR. Trades are closed when an opposite signal is triggered. For example, if the EA enters a long trade, it will close the position when the Supertrend line changes to red (sell signal).

The EA allows full customization of key parameters like trade size, stop loss, take profit, trailing stop etc. It can also trade multiple currency pairs using different magic numbers. Advanced features like martingale and grid trading are available in the paid versions.

Key Features of the Supertrend EA

Here are some of the standout features that make the Supertrend EA a powerful trend trading robot:

Pure trend following strategy – Trades strictly based on Supertrend signals with no repainting or lag.
Works across all markets – Can be used to trade forex, commodities, indices and stocks.
Flexible customization – Allows full control over trade management and money management settings.
No grid or martingale – Uses fixed stop loss and take profit for risk management.
Low drawdown – Closes trades on trend reversal to limit losses. Drawdown is under 30% in most cases.
High winning rate – Wins over 60% of trades on average during strong trends.
Easy to install – Plug and play installation on MT4 and MT5 platforms.

Performance Statistics and Backtest Results

Extensive backtesting shows that the Supertrend EA performs well during trending markets with an average win rate of 60-65% [4]. Here are some key performance metrics:

Return on Investment (ROI) – 150-300% per year
Max Drawdown – Typically 20-30%
Profit Factor – Around 1.5 on average
Sharpe Ratio – 1.2 and higher (good risk-adjusted returns)
Win Rate – 60-65%

The best results are achieved on the daily and 4-hour timeframes for forex pairs (EURUSD, GBPUSD, USDJPY etc.) and indices like S&P 500. Returns are lower for sideways markets and higher timeframes. Overall, the statistics indicate that the Supertrend EA has solid profitability in trending conditions.

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The Pros and Cons

Pros

Proven strategy that identifies and follows trends successfully
Customizable trading settings for full control
Works on all markets and timeframes
Low drawdown compared to other EAs
Easy to install and use

Cons

Generates false signals during range-bound markets
Requires larger stop loss which increases risk per trade
Performance depends heavily on market conditions
Struggles during high volatility and whipsaw markets

Conclusion

The Supertrend EA is a reliable trend following robot that performs well during strong trending markets across forex, indices, commodities and stocks. It offers traders an automated way to identify and trade trends using the robust signals from the Supertrend indicator. While no EA can be profitable in all market conditions, the Supertrend robot has solid profitability metrics to justify its use for trend trading strategies. Overall, it is an expert advisor suitable for both novice and experienced traders alike.