Nickel Supertrend Strategy

Supertrend is a volatility-adaptive trend indicator using ATR. It plots a line that acts as support in uptrends (green) and resistance in downtrends (red). When price crosses the line, it 'flips' signaling trend change. Built-in trailing stop is key advantage.

Standard: ATR Period 10, Multiplier 3.0. In high volatility, increase multiplier to 3.5 to reduce whipsaws. Avoid going below 2.5 for nickel. Use 4H or Daily timeframe.

Wait for bar to CLOSE confirming the flip (not just wick touch). Enter at open of next bar. Require ADX > 25 for trend confirmation. Consider waiting for pullback to Supertrend line after flip.

Use 1.0% risk (reduced from standard 1.5%) due to nickel's volatility. Stop at Supertrend level plus 0.5× ATR buffer. In high volatility, further reduce to 0.5-0.75%.

The Supertrend line automatically trails price - rising in uptrends, falling in downtrends. Use it as your stop level, adding 0.5× ATR buffer for nickel. Exit when price closes beyond buffered Supertrend.

ADX > 25 confirms trending market where Supertrend excels. In ranging markets (ADX < 20), Supertrend whipsaws repeatedly. Filter with ADX significantly improves win rate and reduces losses.

200 MA shows major trend. Supertrend flip aligned with 200 MA (bullish flip above 200 MA) gets full 1.0% size. Counter-trend flip gets half size (0.5%). Alignment improves probability.

Daily Supertrend sets directional bias (green = favor longs). Only take 4H flips aligned with Daily. Daily bullish + 4H bullish flip = strongest signal. Conflicting = skip or minimal size.

Take 50% at 2× risk profit. Trail remainder using Supertrend. Take another 25% at 3× risk. Final 25% rides until Supertrend flip. Captures profits while allowing extensions.

Supertrend flip + supporting fundamental = higher conviction. Bullish flip + Indonesian supply concerns = strong long. Bearish flip + stainless weakness = strong short. Confluence improves probability.

Calculate: HL2 = (H+L)/2, Upper = HL2 + (3×ATR), Lower = HL2 - (3×ATR). Logic: If bullish, Supertrend = Lower until close < Lower. Entry: Flip + ADX > 25. Size: Full if with 200 MA, half if counter. Exit: Opposite flip. Include slippage model.

Buy calls on bullish flip, puts on bearish flip. Defined risk essential for nickel. Use 45-60 DTE for trend development. Eliminates gap risk. LME options exist but liquidity varies.

Calculate ATR percentile vs 100-day history. < 25th: multiplier 2.5, standard sizing. 25-75th: multiplier 3.0, reduced sizing. > 75th: multiplier 3.5, 0.5-0.75% risk. > 90th: options or sidelines.

Compare Supertrend across nickel, copper, EV sector. All bullish = sector confirmation. Nickel alone bullish = investigate nickel-specific factor. Aligned markets improve conviction.

5-10% of commodities allocation. Max 1.5-2% total nickel exposure. Only 1 concurrent position. Manage correlation with copper Supertrend. Weekly 3% drawdown limit.