How do traders use Supertrend?

Green line below price = uptrend; red line above price = downtrend. A flip from red to green is a common buy signal; green to red a common exit or short signal. The line itself is often used as a trailing stop-loss.

Trend and moving averages

Supertrend

Supertrend is a trailing line based on ATR (average true range). It sits below the price in an uptrend (green) and above the price in a downtrend (red), and flips when the price closes through it.

How to read it

Green line below price = uptrend; red line above price = downtrend.
A flip from red to green is a common buy signal; green to red a common exit or short signal.
The line itself is often used as a trailing stop-loss.

Settings

Default ATR length 10 and multiplier 3. A lower multiplier (2) flips more often.

Example rule to test

Rule to test: enter when the close crosses above Supertrend(10, 3); exit when it crosses below.

Common mistake

Using it in a narrow range, where it flips back and forth with small losses.

Try it free on iTradeChart

Add Supertrend on a live chart (tap “+ Indicators”) →
Open this as a ready-made strategy and backtest it →
Scan NIFTY 500 stocks with Supertrend conditions →

For learning only. Backtests use past data and do not guarantee future results. Not investment advice.