Trend

Supertrend

Edited by GANGCO STUDIO · Updated

Contents Supertrend
  1. MACD
  2. Ichimoku Cloud
  3. Pivot Line
  4. DMI
  5. Parabolic SAR
  6. Aroon
  7. Supertrend
  8. Exponential Moving Average
  9. MA Golden Cross
  10. MA Dead Cross
  11. ADX
  12. RSI
  13. Stochastic
  14. SONAR
  15. TRIX
  16. CCI
  17. ROC
  18. Disparity Index
  19. Psychological Line
  20. Williams %R
  21. AB Ratio
  22. Ultimate Oscillator
  23. Volume Profile
  24. OBV
  25. MFI
  26. Volume Oscillator
  27. Volume Ratio
  28. AD Line
  29. EOM
  30. PVT
  31. CMF
  32. VWAP
  33. Force Index
  34. Bollinger Bands
  35. ATR
  36. Envelope
  37. Keltner Channels
  38. Donchian Channel
  39. Standard Deviation
  40. Chaikin Volatility
  41. Three White Soldiers
  42. Three Black Crows
  43. Morning Star
  44. Evening Star
  45. Hammer
  46. Inverted Hammer
  47. Hanging Man
  48. Shooting Star
  49. Doji
  50. Bullish Marubozu
  51. Bearish Marubozu
  52. Bullish Engulfing
  53. Bearish Engulfing
  54. Piercing Line
  55. Dark Cloud Cover
  56. Bullish Harami
  57. Bearish Harami
  58. Elder-Ray Index
  59. Coppock Curve

A trend indicator that keeps a single line above or below the price and uses its color and position to show whether the price is in an uptrend or a downtrend.

Weapon tier
Advanced
Slots used
On chart 1/6

Concept

Supertrend is a single line. In an uptrend it sits “below” the price, in a downtrend it sits “above” the price, and the moment the trend changes it jumps to the other side. The game draws uptrend stretches in the candles’ up color and downtrend stretches in the down color.

The distance between the line and the price follows recent volatility (ATR). So on a stock that swings hard the line stays far away, and on a quiet stock it hugs the price.

  • Supertrend

Charts by TradingView Lightweight Charts™

80 candles with the Supertrend line and volume. In the first part the line is mostly above the price (downtrend), and at candle 60 (yellow vertical line) the close crosses that line, so the line jumps below the price and the trend turns up. After that the line climbs in steps, following the price. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.

At the candle marked with the yellow vertical line, the line jumps from above to below. For a few candles after that the price comes down close to the line but does not break it, so the uptrend continues. Earlier in the chart there is also a stretch that briefly turned up and quickly turned back. A change does not always last. Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.

How it is calculated

Find the ATR: a value that shows how much the candles swung on average over the last 10 candles (measured with the high, the low and the previous close).

Candle middle = (high + low) ÷ 2. Basic upper band = middle + ATR × 3, basic lower band = middle − ATR × 3.

Lock the bands: the upper band only moves down, never up, and the lower band only moves up, never down (after the previous close crosses the band, it is set again). This is why the line looks like a staircase.

When the close crosses above the upper band, the trend turns up and the lower band is drawn. When the close falls below the lower band, the trend turns down and the upper band is drawn.

Parameters

What it setsName in the gameDefaultRange
Candles used to measure volatility (ATR) atrPeriod 10 2 – 100
Distance between the line and the price (multiple of the ATR) multiplier 3 0.5 – 10

Trading ideas

Following the trend: the most common use is to buy when the line jumps below the price (uptrend) and sell when it jumps above (downtrend). The chart on this page shows the turn to an uptrend.

Stop level: in an uptrend, some traders use the line itself as the “exit if it breaks” level. Since the line only moves up, the level rises along with the profit.

Common traps

  • When the price moves sideways, the line flips back and forth often, and buying and selling on every flip piles up losses. Check first whether there is a trend at all (lesson 2).
  • The line only changes “after” the close crosses the band, so it is always a little late. The first part of a big move has often already passed.
  • A smaller 3 flips faster but gives more false signals; a larger one gives fewer false signals but reacts later. Neither is a sure signal.

In the game

  • “Supertrend” is a “Advanced” weapon and uses 1 “On chart” line (limit 6). The ATR it uses inside does not take a slot of its own.
  • Together with the two Simple Moving Average lines in the starting setup (2 lines), it uses 3 lines, leaving 3 free.
  • The line breaks where the trend changes; uptrend stretches are drawn in the candles’ up color and downtrend stretches in the down color.

Related indicators and lessons

  • MACD — A trend indicator that uses the gap between a fast and a slow exponential moving average to show whether the two averages are pulling apart or closing in.
  • Ichimoku Cloud — A trend indicator that uses five lines and a cloud to show at a glance where the price sits within its past price range.
  • Pivot Line — An indicator that uses the previous candle’s high, low and close to set five reference lines (Pivot, R1, R2, S1, S2) for the current candle in advance.
  • DMI — A trend indicator that shows, as two lines side by side, the force pushing highs higher (+DI) and the force pushing lows lower (−DI).
  • Parabolic SAR — An indicator that uses a single trailing “stop line” to show whether the price is in a rising or a falling stretch, and when it flipped.
  • Aroon — An indicator that judges whether a new trend has started by how long ago the recent high and low were made.
  • Exponential Moving Average — A line that averages recent closes with more weight on the newest ones, so it follows price changes faster than the simple moving average.
  • MA Golden Cross — An event marker that puts a vertical line on the candle where the short moving average crosses up through the long one.
  • MA Dead Cross — An event marker that puts a vertical line on the candle where the short moving average crosses down through the long one.
  • ADX — An indicator that shows, as a number from 0 to 100, how strongly the price is moving in one direction, whether up or down.
  • 2. Trends and sideways moves