Supertrend

Supertrend is a single-line trend-following indicator that combines ATR-derived bands with directional flip logic. It plots one line that flips between an upper band (during downtrends) and a lower band (during uptrends), based on whether price closes through the opposite band.

Compared to EMA-based trend strategies, Supertrend is more decisive — it never gives ambiguous "the EMAs are crossing" signals. Either you are above the line (long bias) or below it (short bias), and the line itself acts as a built-in trailing stop.

Long entry triggers on the bar after the Supertrend direction flips from down (-1) to up (+1) — i.e. price closes above the previous upper band.

Short entry triggers symmetrically on a flip from up to down — price closes below the previous lower band.

Exit is the next direction flip (always-in-position style) or a fixed N-bar hold (default 10).

Defaults: ATR period 10, multiplier 3.0, 10-bar hold.

Sustained trending markets where one Supertrend flip captures most of a directional move. BTC bull / bear cycles and major-pair forex trends often produce 50-200 bar Supertrend runs.

Higher timeframes (4-hour and daily). Lower timeframes flip too frequently for the strategy to be tradeable after costs.

Sideways markets — Supertrend whipsaws on every minor reversal, generating losing trades on each flip.

Highly volatile single-bar moves where the multiplier is too tight to absorb noise but too wide to react quickly.

Markets with structural regime changes (e.g. bull-to-bear transition) — the flip triggers, but momentum doesn't follow through.