Supertrend — what it is and how to use it in trading
Definition
Supertrend is an ATR-based trend overlay — a single line that stays below price in an uptrend and above price in a downtrend, flipping to the opposite side when the direction changes.
How it works in the builder
The supertrend operand takes period (default 10, the ATR window) and multiplier (default 3) parameters. Upper and lower reference bands are built around the bar's midpoint at a distance of multiplier×ATR, and the indicator's line "sticks" to whichever band is nearer until price closes through it — at which point the line flips to the opposite side.
What it looks like on the chart
Drawn as a stepped (not smooth) right-angled line: it sits below the candles in green while the uptrend holds, then at the break point it switches in one sharp move to above the candles and changes color.
Typical use
The line's position relative to price is used as a trend filter or trailing stop: close > supertrend(10, 3) as a long filter while the line sits below price. The flip itself, when the line switches sides, is often used as a standalone entry or exit signal.
Common pitfalls
Like any ATR-based trailing stop, on a ranging or choppy market Supertrend can flip back and forth frequently with little predictive value — it is fundamentally a trend-following tool. multiplier sets the trade-off between sensitivity and the number of false flips, and there is no single "correct" value across every instrument and timeframe.
This block is available in the strategy builder
137 no-code blocks — build an entry condition with this term and test it on history
Historical results do not guarantee future ones. The service is an informational and analytical tool, not an individual investment recommendation; trades are not executed.