What the Supertrend indicator is
Supertrend is a trend-following line drawn on the price chart. It sits below price while the market is rising and above price while it is falling. When price closes through the line, the line jumps to the other side and changes colour.
It is built on the ATR (Average True Range), which measures how far price typically moves per bar. Supertrend is a lagging indicator: it reacts after price has moved. See leading vs lagging indicators.
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A drawn example
The chart below is a sketch, not real prices.
During the rise, the line steps up behind price and never steps down. When a close falls below it, the line moves above price and steps down from then on.
Formula
For each bar:
- Midpoint: halfway between the bar's high and low.
- Upper band: midpoint plus (multiplier × ATR).
- Lower band: midpoint minus (multiplier × ATR).
Then the trailing rule applies:
- In a rising phase, the line follows the lower band. It may rise or stay flat. It never falls.
- In a falling phase, the line follows the upper band. It may fall or stay flat. It never rises.
- When the close crosses the active line, the phase switches and the line moves to the opposite band.
Versions differ. Some smooth the true range with Wilder's method and some use a simple average. Some use the close instead of the midpoint. Two Supertrend files with the same inputs can therefore flip on different bars.
Supertrend settings
There are two inputs:
| Input | What it changes | Smaller value | Larger value |
|---|---|---|---|
| ATR period | How many bars the ATR averages | Reacts faster to volatility changes | Smoother, slower to adapt |
| Multiplier | Distance of the line from price | Tighter line, more flips | Wider line, fewer and later flips |
Most versions ship with a commonly used default pair. Check the values in the indicator's input tab rather than assuming them.
Best Supertrend settings: no setting is best for every market. A wider multiplier suits instruments with large swings, such as gold or stock indices, if you want fewer flips. A tighter one reacts sooner but flips more in ranges. Test any choice on a demo account across trending and ranging periods. Do not tune it to fit one past stretch of chart.
How to add it in MT4 and MT5
Supertrend is not part of MetaTrader's standard indicator list. It is added as a custom indicator:
- In the platform, use File → Open Data Folder, then open MQL4 → Indicators (MT4) or MQL5 → Indicators (MT5).
- Copy the indicator file there. Use a source you trust, such as the MQL5 code base or Market built into the platform.
- Refresh the Navigator panel or restart the platform.
- Drag Supertrend onto the chart and set the inputs.
Exness traders using MetaTrader 4 or MetaTrader 5 follow the same general MetaTrader steps. Do not run files from unknown sources, because compiled code can do more than draw a line.
How to read it
- Line colour and side: show the current phase. They do not predict what comes next.
- Line slope: a flat line in a trend often means price is pausing.
- Distance from price: a large gap means a wide reference level after a strong move.
Common uses:
- Trailing reference: some traders use the line as a trailing stop level. The ATR spacing gives the market room to move.
- Trend filter: other tools are read only in the direction of the line, often together with multiple timeframe analysis.
- Comparison: it behaves much like Parabolic SAR, but the line's spacing comes from volatility rather than an acceleration factor.
A Supertrend strategy is a set of rules built around these readings. It is not a signal service. See trading strategies and risk management.
Where Supertrend misleads
- Ranges: in sideways markets the line flips repeatedly. Each flip happens after price has already moved. Pair it with ADX or a check of market structure.
- Current bar: the line and colour can change until the bar closes. A flip seen mid-bar may disappear. See repainting indicators.
- Gaps and news spikes: price can jump past the line. An exit placed at the line may fill much worse. A spike also inflates the ATR and widens the line for many bars afterwards.
- Low timeframes: spread and noise take up a larger share of each move, so flips cost more relative to the range.
- Late exits: a wide multiplier can give back a large part of a move before the line flips.
Leveraged CFD and forex trading can lose money fast. No indicator setting removes that risk.
Frequent questions
Does Supertrend repaint?
Closed bars normally keep their values. The current bar can change until it closes, so read flips on closed bars.
What are the default Supertrend settings?
They depend on the indicator file. Open the input tab to see the ATR period and multiplier your version uses.
Is there a best Supertrend setting?
No. Suitable settings depend on the instrument, the timeframe and the type of exit you want. Test them on demo first.
Can Supertrend be used alone?
It can, but it struggles in ranges. Many traders combine it with support and resistance or a trend-strength filter.
Is Supertrend the same as ATR?
No. ATR measures volatility. Supertrend uses ATR to place a trailing line around price.