Supertrend Indicator
By Rohit Singh · Mr. Chartist, SEBI Registered Research Analyst
Supertrend is one of the most popular trend-following indicators in Indian markets, especially among swing and positional traders. It's simple, visual, and effective — a green line below price means 'buy', a red line above price means 'sell'. Many traders in India use Supertrend as their primary entry/exit system because it removes emotional decision-making.
Key points
- Supertrend is calculated using ATR (Average True Range) multiplied by a factor. Default settings: Period = 10, Multiplier = 3
- Green (below price) = Bullish trend. Signal to buy or hold long positions. The green line acts as a trailing stop-loss
- Red (above price) = Bearish trend. Signal to sell or short. The red line acts as a trailing stop-loss for short positions
- Trend Change: When Supertrend flips from red to green = buy signal. Green to red = sell signal. Very clear, no ambiguity
- Works best in trending markets. In sideways/choppy markets, it generates too many false signals (whipsaws)
- Use on daily charts for swing trading, weekly charts for positional trades. Weekly Supertrend is very reliable for capturing major trends
- Combine with volume: Supertrend flip to green + above-average volume = high conviction buy signal
- Multi-timeframe: When both daily AND weekly Supertrend are green, you're in a confirmed uptrend across timeframes — highest conviction scenario
- Don't change default settings randomly. 10, 3 works well for most Indian stocks. For more sensitive signals, try 10, 2. For smoother signals, try 10, 4
Upper Band = (High + Low) / 2 + (Multiplier × ATR) | Lower Band = (High + Low) / 2 − (Multiplier × ATR)
Use Supertrend as a trailing stop-loss rather than an entry signal. Enter using chart patterns or candlestick signals, then use the Supertrend line as your trailing stop. This keeps you in profitable trades longer while providing a clear exit when the trend reverses.
Written By
Rohit Singh
Mr. Chartist
With 14+ years of experience in Indian financial markets, Rohit Singh (Mr. Chartist) is a SEBI Registered Research Analyst, Amazon #1 bestselling author, and the founder of Investology — a premium trading ecosystem trusted by a 1.5 Lakh+ strong community across India.