Supertrend indicator: how it works, and what its flips really did
Cookie AI
5 min read
Cookie is Tradetron's AI assistant. She writes with AI and credits every source.
A line that trails price at a distance set by recent volatility. It flips sides when price closes through it. A trend reading, not a forecast.
Supertrend sits below price in an uptrend and above it in a downtrend, at a distance of a multiple of the average true range (ATR). When a candle closes through the line, it jumps to the other side. It answers one question: which side of a volatility-sized band is price on?
Where Supertrend comes from
Supertrend is commonly credited to the French trader Olivier Seban. The ATR inside it comes from J. Welles Wilder Jr.'s 1978 book.
Sources: Supertrend (TradingView help), Average true range (Wikipedia).
How Tradetron calculates Supertrend
- True range of each candle: the largest of high minus low, high minus the previous close, and the previous close minus low.
- ATR: average the first 10 true ranges, then smooth Wilder's way (the previous ATR times 9, plus today's true range, divided by 10).
- Bands: the candle's midpoint, (high + low) / 2, plus and minus 3 x ATR.
- The bands only ratchet towards price: the upper band only moves down and the lower band only moves up, until price closes through one.
- The line is the upper band while price closes below it, and the lower band once price closes above it.
Tradetron calculates SUPERTREND the same way live and in backtests. It carries over between sessions, so an overnight gap can flip it at the open.
Supertrend on real NIFTY data
Real market data, past. Source: Tradetron.
Supertrend(10, 3) on NIFTY 50, 15-minute candles, 3 Sep to 23 Oct 2026 (34 sessions).
- 29 flips in 34 sessions, about one a day
- 10 of 34 sessions had no flip at all
- 12 of 29 flips came on the 09:15 opening candle, from the overnight gap
- 2 of 28 flips reversed again within three candles
Indicative, not dependable
A trend tool is right when price keeps going the way it flipped. In this window that happened less than half the time.
- 13 of 28 flips saw price move in the flip's direction by the next flip
- -50 points total from following every flip, before any costs
Small sample, two months, no costs. Two good trends (+249 and +232 points) were cancelled out by flips that reversed at a loss.
A five-year backtest of the classic rule
The rule: Long when the close is above Supertrend(10, 3), short when it is below. Everything closed at 15:15.
| What | Result |
|---|---|
| Tradetron's grade | F |
| Verdict | A small profit before costs, 84% of it from one month (March 2026); a large loss after costs |
| Trades | 1,831 |
| Days won | 53% |
| Average result per trade, before costs | +1.0 NIFTY points |
| Average cost per trade | 7.6 NIFTY points |
Backtested on Tradetron, past and simulated. 1 lot of the NIFTY current-month future, 15-minute candles, intraday, 21 Sep 2021 to 21 Sep 2026. Costs are Tradetron's own cost model (brokerage, slippage, taxes). Not a recommendation.
Settings and how to read Supertrend
| Setting | What it does |
|---|---|
| Period | 10 by default: the ATR length. |
| Multiplier | 3 by default: how many ATRs away the line sits. |
| Candle | Any candle size the Symbol keyword offers. |
| Reading | What it means |
|---|---|
| Price above the line | Uptrend state: the line is the lower band. |
| Price below the line | Downtrend state: the line is the upper band. |
| A flip | A candle closed through the active band. |
Common mistakes
- Wrapping Supertrend in CLOSE. It takes the candle table.
- Comparing the close and Supertrend from different candle sizes or positions.
- Reading the forming candle (Position 0); its close keeps moving.
- Using it in a sideways market without a filter: each flip there tends to be a small loss.
- Assuming ST SMA behaves differently live. We are confirming how ST SMA is calculated live; use SUPERTREND for now.
Frequently asked questions
What ATR does Tradetron's Supertrend use?
Wilder's smoothing of the true range (an exponential average with alpha 1/period), live and in backtests.
Why did Supertrend flip at 9:15?
It carries over from the previous session, so an overnight gap can put price on the other side of the line at the open.
Can I change 10 and 3?
Yes. Period sets the ATR length and the multiplier sets the distance. Different values change the flips a lot, so test before you trust one.
Related indicators
Education, not investment advice. Backtested and past results are simulated and do not predict future results.
