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Indicators

What Is the Supertrend Indicator

The Supertrend indicator is one line drawn on the price at a set distance from it: three average day-ranges under the middle of the day while the price is above the line, and three over it while the price is below; it only tightens, never loosens, and when the price crosses it, it jumps to the other side and changes colour. This paper shows you gold on 22 April 2025 measured from real bars, the idea as a clamp on a rope, the green and red steps on the daily chart, three weeks of the arithmetic, and the two settings on your platform.

Difficulty
Advanced
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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One day, one line

Supertrend is one line drawn on the price a set distance from it. Take one real day, gold on 22 April 2025. The day ran from a low of 3366.68 to a high of 3499.96, so its middle was 3433.32. The average day's range over the previous ten days — the ATR, how far the price moves between a day's high and low, averaged — was 85.31. Stack three of those under the middle of the day and you land on 3177.39: that is where the line sits. It is green because the price is above it; while the price is below, the line sits three ranges over the middle instead, and it is red.

A clamp on a rope

Picture a clamp on a rope, with a gold bead for the price. While the price climbs, the clamp sits three day-ranges under it and slides up behind it. It locks against sliding back down, so on a quiet day it simply holds where it is. While the price falls, the clamp sits three day-ranges over it and slides down behind it, never back up. The moment the bead crosses the clamp, the clamp jumps to the other side and the colour changes. That jump is the flip, and it is the thing people look at Supertrend for.

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