The Traditional Supertrend strategy is buy whenever the trailing stoploss breaks on the higher side and reverse to shorts when it breaks on the lower side. And the Buy or Sell Decision is taken on the close of the candle.
Now how to create a strategy where when the supertrend turns to buy mode and the reference high is marked at the time of supertrend turning to buy mode. But still the actual buy will come only if the high is taken out on the upper side. Similarly when the supertrend turns to sell mode and the reference low is marked at the time of supertrend turning to sell mode. But still the actual buy will come only if the low is taken out on the lower side. When the Reference High or Low is not broken yet then the old position(Long or Short) continues.
It is just a prototype strategy to demonstrate how such logical conditions can be incorporate in your strategy to bend the system the way you required.
Why Such a Strategy?
When there is a high volatility in the market and when your supertrend signals comes at huge spike then probably some of the cases you will end up catching the signal at the peak. Most of the Big Gapup and Gap down and then a sharp reversal without taking a newer high or newer lows in such a scenario you will be end up saving a few bucks in your strategy. However it has it own disadvantages too as it delays your trading position to take at a little higher price every time as it waits for reference high or low breakout.
Steps to Install
Download Supertrend High-Low Breakout – Amibroker AFL code
2)Unzip Supertrend High-Low Breakout.zip to local folder
3)Copy Supertrend High-Low Breakout.afl file to \\program files\\amibroker\\formula\\basic folder
5)Open Amibroker and Open a New Blank Chart
6)Goto Charts->Basic Charts and apply/drag-and-drop the Supertrend High-Low Breakout code into the blank chart
7)Bingo you are done. Now you will be able to see the Supertrend High-Low Breakout system with Buy and Sell signals.