Supertrend

What it is

Supertrend draws a line a set number of ATRs from the bar's midpoint: (high + low) ÷ 2 minus (or plus) a multiplier × ATR. Common defaults are a 10-period ATR and a multiplier of 3. In an uptrend the line sits below price and only moves up; when a close falls below it, it flips above price and starts trailing down. It's usually credited to Olivier Seban, and community versions are among the most-used free scripts on TradingView.

How to spot it

• Line under price and coloured as bullish: uptrend.
• A close through the line: the flip.

How to use it

• Use the flip as a trend filter or entry trigger, and the line itself as a trailing stop.
• Raise the multiplier for fewer, later flips.

Common mistakes

• Using it in ranges, where it flips back and forth.
• Optimising the settings to fit one past trend.

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