GlossaryIntermediate
Supertrend Indicator
A trend-following overlay, calculated from Average True Range and price, that flips above or below price to signal a trend direction change.
The Supertrend indicator is a trend-following overlay calculated from Average True Range (ATR) and price, plotted as a single line that sits below price during an uptrend and above price during a downtrend, flipping position when the trend is considered to have reversed.
Because it's built on ATR, Supertrend's distance from price automatically adjusts with volatility — widening during volatile conditions and tightening during calmer ones. See Kaavon's dedicated Supertrend Indicator article for the full calculation and its common use as a trailing stop reference.
Examples
- Supertrend flipping from below price to above price is commonly read as a signal that the trend has reversed from up to down.
- Supertrend's ATR-based construction means it automatically sits further from price during volatile conditions than during calm ones.