Tools & IndicatorsSupertrend
TrendEasy[ MP.IND.SUPERTREND ]
Supertrend
Supertrend Indicator
Supertrend is an ATR-based trend-following indicator that appears as a single colored line: green below price (uptrend) or red above price (downtrend).
Category
Trend
Difficulty
Easy
Markets
All
Timeframe
1H, 4H
Combinations
3 tools
Signals
5 setups
LIVE CHARTSupertrend ACTIVE
[ HOW TO READ THE CHART ]
Green Zone: Green line below price → Uptrend: only long positions
Red Zone: Red line above price → Downtrend: only short positions
Main Line: Flip from red to green (candle close) → Buy signal + Stop Loss at the line level
Confluence: Combine Supertrend with RSI for maximum probability
[ WHAT TO WATCH ON THE CHART ]
Observe how Supertrend behaves relative to key price points. Note moments when the indicator reaches extreme levels and how price reacts. Look for divergence patterns between the indicator and price movement.[ FORMULA ]
Basic Upper Band = (H+L)/2 + Multiplier × ATR(N) Basic Lower Band = (H+L)/2 - Multiplier × ATR(N) Supertrend follows price using these bands with flip logic
What signals does Supertrend generate?
Green line below price → Uptrend: only long positions
Red line above price → Downtrend: only short positions
Flip from red to green (candle close) → Buy signal + Stop Loss at the line level
Flip from green to red (candle close) → Sell signal + stop at the line level
Price approaches the line without flipping → Possible entry zone in the trend direction
What is Supertrend and how does it work?
Supertrend is an ATR-based trend-following indicator that appears as a single colored line: green below price (uptrend) or red above price (downtrend). It's one of the most popular indicators among retail traders because it's visually immediate and includes a built-in dynamic stop loss. When the line flips color, it's a trend reversal signal. Unlike moving averages that give 'fuzzy' signals, Supertrend is binary: you're either in an uptrend or a downtrend. Originally created by Olivier Seban, it was popularized by traders like Rayner Teo and the TradingView community where it's one of the most used indicators.
How do you use Supertrend in trading?
Supertrend is used in three ways:
1) TREND IDENTIFICATION (primary): When Supertrend is green (below price) = active uptrend: consider only long positions. When it's red (above price) = downtrend: consider only short positions. This simple filter already eliminates half the losing trades taken counter-trend.
2) DYNAMIC STOP LOSS: The Supertrend line level is exactly where to place the stop loss. This is the main advantage: the stop loss isn't arbitrary but based on volatility (ATR). In an uptrend, the stop rises progressively following price. As long as price stays above the Supertrend, hold the position — close only if price closes below.
3) ENTRY SIGNAL: The flip from red to green (on candle close) is the buy signal. The flip from green to red is the sell signal. Many traders use the flip as an exit trigger from the opposite position and/or opening the new one.
PARAMETER OPTIMIZATION:
- Multiplier 2.0 (aggressive): more signals, closer stops, more false flips in ranging
- Multiplier 3.0 (default): balanced for normal markets
- Multiplier 4.0 (conservative): fewer signals, wider stops, works better for swing
- ATR Period 7-10 for crypto and fast markets, 14 for standard stocks/forex
COMBINATION WITH MACRO FILTER: Use Supertrend on H1 for timing + EMA 200 on Daily for bias. Only trade in the direction of EMA 200.
What are the strengths of Supertrend?
Extremely simple to read: green = up, red = down
Includes ATR-based dynamic stop loss
Excellent as a trend filter for other systems
Suitable for beginners too
What are the limitations of Supertrend?
Many false signals in sideways markets
Lagging by nature (based on ATR which is an average)
Does not distinguish trend strength
Does not provide profit targets: only direction and stop
[ RELATED INDICATORS ]
[ RELATED CONTENT ]
Glossary:Bear Market
Liked this? Get one like it every week
Weekly market setups, new guides and AI insights. Free, zero spam.