The Supertrend indicator combines ATR and price to produce trailing support or resistance. When the Supertrend line flips from above to below price or vice versa, it suggests a potential trend change. This strategy trades those flips.
On each candle an ATR-based calculation updates the Supertrend level. A switch from above price to below triggers a long entry, while a move from below to above creates a short. The code sample omits explicit stops, so exits are discretionary or managed by a separate risk module.
The indicator can react quickly to volatility, so traders often combine it with additional filters to reduce whipsaws.
- Entry Criteria: Supertrend switches sides relative to price.
- Long/Short: Both.
- Exit Criteria: Manual or external stop.
- Stops: Not defined.
- Default Values:
- Period = 10
- Multiplier = 3.0
- CandleType = 15 minute
- Filters:
- Category: Trend following
- Direction: Both
- Indicators: Supertrend
- Stops: Optional
- Complexity: Basic
- Timeframe: Intraday
- Seasonality: No
- Neural networks: No
- Divergence: No
- Risk level: Medium