Supertrend Indicator
Learn Supertrend - an ATR-based trend-following indicator with clear buy/sell signals and trailing stop functionality.
What is Supertrend?
Supertrend is a popular trend-following indicator that uses ATR (Average True Range) to calculate dynamic support and resistance levels. It plots a single line that changes color based on trend direction.
Upper Band = (High + Low) / 2 + (Multiplier × ATR)
Lower Band = (High + Low) / 2 - (Multiplier × ATR)
Default: ATR Period = 10, Multiplier = 3
Lower Band = (High + Low) / 2 - (Multiplier × ATR)
Default: ATR Period = 10, Multiplier = 3
How to Interpret
Bullish Signal
- Supertrend line is GREEN
- Line is BELOW price
- Acts as dynamic support
- Buy signal when price crosses above
Bearish Signal
- Supertrend line is RED
- Line is ABOVE price
- Acts as dynamic resistance
- Sell signal when price crosses below
Key Features
- Clear Signals: Color change = trend change
- Built-in Stop Loss: Supertrend line acts as trailing stop
- Adapts to Volatility: Uses ATR so it adjusts automatically
GarudaAlgo Implementation
GarudaAlgo Enhancement
GarudaAlgo uses Supertrend as part of the trend confirmation system. When signals align with Supertrend direction, the probability score increases. We also use Supertrend for dynamic stop-loss suggestions.
Settings Comparison
- 10, 3: Standard - balanced between signals and noise
- 10, 2: Faster - more signals but more whipsaws
- 10, 4: Slower - fewer signals, less noise
Trading Strategy
- Wait for Supertrend color change
- Confirm with other indicators (RSI not extreme, MACD aligned)
- Enter trade on first pullback to Supertrend line
- Use Supertrend line as trailing stop
- Exit when Supertrend changes color