Supertrend
A trend-following indicator based on ATR that flips between bullish and bearish.
Supertrend uses ATR to create a dynamic support/resistance line that flips between above and below price. When the line is below price, the trend is bullish. When it's above, the trend is bearish. The flip itself generates the trading signal.
Why It Matters
Supertrend provides clear, unambiguous trend signals — you're either bullish or bearish, with no middle ground. It automatically adapts to volatility through ATR, making it effective across different market conditions without constant parameter tuning.
Settings Explained
Direction — Whether to look for bullish flips, bearish flips, or both.
ATR Period — The ATR lookback used for calculating the bands. Standard is 10.
Multiplier — How many ATRs away the Supertrend line is placed. Standard is 3. Higher multipliers mean wider bands and fewer but larger signals.
Look Back Mode — How far back to calculate.
Example Use Case
You use Supertrend as your primary trend filter. When Supertrend flips bullish, you only look for long setups. When it flips bearish, you only look for short setups. This keeps your strategy aligned with the dominant trend.
Supertrend works best in trending markets. In choppy, ranging conditions, it will flip back and forth frequently, generating false signals. Consider combining it with ADX — only follow Supertrend signals when ADX is above 25.