How Supertrend works

The Supertrend indicator appears directly on the price chart as a single line that changes position and color depending on market direction.

• When the line is below the price and green, it indicates an uptrend.
• When the line moves above the price and turns red, it signals a downtrend.

This simple visual structure helps traders quickly identify the current market direction.

The indicator is built using two key elements: price and average market volatility. It measures how much the price typically moves over a set number of candles and then applies a multiplier to create a buffer around the price. This buffer determines how far the price must move before the indicator signals a possible trend change.

A trend shift is confirmed only when a candle closes beyond the Supertrend line, not when the price briefly crosses it. For example, if the line is red and above the price but a candle closes above it, the line moves below the price and turns green. This close-based confirmation helps filter out small price fluctuations and makes it easier to distinguish between temporary pullbacks and genuine trend reversals.