Supertrend

How do I read Supertrend?

• Indicator below price = bullish trend regime. The line acts as dynamic support; pullbacks toward it are buy-the-dip candidates.
• Indicator above price = bearish trend regime. The line acts as dynamic resistance.
• Direction flips (bullish ↔ bearish) are the core signal. Each flip is a regime change.
• Line distance from price = current volatility. The line widens during volatile periods (giving trades more room) and tightens during calm periods.
• Walking the line: in strong trends, price often retests the indicator line repeatedly without breaking it. Each retest is a continuation entry candidate.
• Frequent flips signal a choppy market — the indicator is whipsawing and entries should be avoided until volatility settles into a clear regime.

What are the default Supertrend settings?

How do I code Supertrend in Pine Script?

//@version=5
indicator("Supertrend Example", overlay=true)

factor    = input.float(3.0, title="Factor",     minval=0.1, step=0.1)
atrPeriod = input.int(10,    title="ATR Period", minval=1)

[supertrend, direction] = ta.supertrend(factor, atrPeriod)

upTrend   = direction <  0 ? supertrend : na
downTrend = direction >= 0 ? supertrend : na

plot(upTrend,   title="Up Trend",   color=color.green, style=plot.style_linebr, linewidth=2)
plot(downTrend, title="Down Trend", color=color.red,   style=plot.style_linebr, linewidth=2)

Pine's ta.supertrend() returns both the line value and direction (negative = bullish, positive = bearish). Plotting bullish and bearish segments separately (with plot.style_linebr to break the line on flips) gives a clean visual: green when price is supported, red when resisted. Direction flips fire only on a confirmed close through the line — built-in confirmation, no extra logic needed.

How is Supertrend calculated?

Supertrend builds a single line from ATR-based bands and flips direction when price closes across it. The factor controls how far the line sits from price; ATR scales the distance to the asset's volatility.

1. 1.Compute the basis: (high + low) / 2.
2. 2.Compute the upper band = basis + (factor × ATR(period)). Compute the lower band = basis − (factor × ATR(period)).
3. 3.When the trend is bullish, the indicator line equals the lower band, trailing below price as support.
4. 4.When price closes below the lower band, the trend flips bearish; the indicator line moves to the upper band as resistance.
5. 5.When price closes back above the upper band, the trend flips bullish again; the line moves back to the lower band.

When does Supertrend fail?

What mistakes do traders make with Supertrend?

• Trading every flip on every timeframe. Lower timeframes produce many flips that do not translate into meaningful moves. Higher timeframes (1H+) and trend-aligned plays have much better hit rates.
• Tuning the factor below 2.0. A 1.5× factor produces a tight line that flips on minor fluctuations. The default 3.0 balances responsiveness against noise — go lower only when you have proven a tighter setting works on out-of-sample data.
• Ignoring choppy-market detection. Supertrend bleeds money in ranges. Always check whether the chart is trending (ADX > 20, clear higher highs / lower lows) before treating flip signals as actionable.
• Using Supertrend without a stop discipline. The indicator gives you a trailing reference but flipping is reactive — by the time it flips, you may have given back significant profit. Many traders use a tighter manual stop alongside Supertrend's flip.
• Stacking too many Supertrends. A two-Supertrend confluence can be useful (fast + slow), but three or more clutters decisions and rarely improves results.

How does Supertrend compare to similar tools?

Supertrend FAQ

Continue exploring

Related indicators in the Playbook