Supertrend Indicator

What it measures:

Supertrend tracks overall trend direction using Average True Range (ATR) multipliers to adjust dynamic support and resistance levels around market price action.

How to interpret it:

• Trend Line Position: Supertrend line positioned below price indicates an uptrend (Buy); line positioned above price indicates a downtrend (Sell).
• Flip Signals: The exact bar where Supertrend switches sides marks a trend flip event.

Used for:

• Trend-following trade entry triggers.
• Dynamic trailing stop-loss execution.

Limitations:

• Generates frequent whipsaws during tight ranging or low-volatility periods.
• Does not predict trend tops or bottoms; acts strictly as a lagging trend-following system.