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Supertrend indicator explained

Updated 11 October 2026

Supertrend is a trend-following line drawn on the price chart. It sits below price while the trend is up and above price while the trend is down. It is very popular on Indian charting platforms, especially for intraday charts.

It is built from two things: the midpoint of each candle and the Average True Range (ATR), a measure of how much price typically moves. The common default settings are ATR period 10 and multiplier 3.

Step 1: True range and ATR

True range (TR) for a candle is the largest of:

ATR is the average of TR over the chosen period, usually smoothed the way Wilder smoothed RSI. A larger ATR means a more volatile stock.

Step 2: Basic bands

Step 3: Final bands and the trend

The bands are allowed to move only in one direction while a trend lasts:

This one-way rule is what gives Supertrend its staircase shape.

Line below price (uptrend)Flips above
The Supertrend line (blue) steps up under price, then flips above it after a close below the line.

Worked example

Settings: multiplier 3. Stock ABC is in an uptrend on the daily chart.

Day 1

Day 2

Day 3

If on a later day Stock ABC closes below ₹495.80, the trend flips to down and the line jumps to that day's upper band, above price. Notice that higher volatility (ATR rising from ₹8 to ₹9) pushes the bands further away from price.

How Supertrend is commonly read

Limits you should know

The risk side

Supertrend is widely shared in intraday and options "systems". Remember the base rate: SEBI's studies (SEBI study, 2023 and 2025) found about 9 in 10 individual F&O traders lost money in FY22 and FY25. Work out your position size from the distance to your exit level, so a flip that goes against you costs an amount you have already accepted.

Quick recap

Questions people ask

What are the default Supertrend settings?
Most platforms use an ATR period of 10 and a multiplier of 3. These are conventions, not optimal values.
Why does Supertrend change colour?
The colour shows which band is active. It turns when a candle closes on the other side of the line, which flips the calculated trend.
Does Supertrend repaint?
On the live candle the value and colour can change until the candle closes. Once a candle has closed, its Supertrend value is fixed.
Is Supertrend good for intraday trading?
It is used on intraday charts, but short timeframes produce many flips in sideways sessions. It describes the trend after the fact and cannot predict moves.

Sources

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