This Strategy will work on:
High Priced volatile stocks.
This is because if you work on a low priced stock, the one minute movement will likely be in a few paise, making the trade un-remunerative.
Also, Supertrend gives good opportunities on 1 Minute candles for volatile stocks and indices. Check it out on non volatile stocks and compare.
Supertrend (7, 3)
1 Minute Candles
The ability to draw straight lines
Free Screeners are not available for 1 Minute Candles and therefore identifying stocks in a live market without access to a paid tool is not possible.
You need to work with indices and volatile stocks based on previous day’s EOD data.
How To Play The Supertrend-Price Action Strategy
A. Buy Signal
A Buy signal was generated for BNF today at 10.15 AM.
You should mark the support on this candle (the pink line) and enter into a trade.
Thereafter, you should keep marking supports every 10 minutes.
If the stock falls and breaks the support, sell and book profit.
If the trade works in your favor, trail your SL.
Your first SL should be your first support line.
So long the stock remains a Buy as per Supertrend. you can make entries and exits. You can view in the chart above that so long the Supertrend signalled a buy, there were 2-3 entries and exits.
B. Sell Signal
A Buy signal was generated for BNF today at 11.00 AM.
You should mark the resistance on this candle (the pink line) and enter into a trade.
Thereafter, you should keep marking resistance points every 10 minutes.
If the stock starts rising and pierces the resistance upwards, buy and book profits or losses.
If the trade works in your favor, trail your SL downward.
Why is Price Action Combined with Supertrend?
This is because Supertrend (7,3) is a slow signal. It lasts for many candles and it is extremely slow when it comes to exit alerts.
When you draw support and resistance lines, you can overcome Supertrend’s slowness and at the same time take advantage of the fact that it lasts for many candles.
So go ahead and paper trade this strategy and tweet if it works for you.