Indicator Formula

Technical Details — Supertrend (ST)

Overview

Supertrend uses ATR to create adaptive trend bands that flip between support and resistance.

Mathematical Derivation

Step 1 — Calculate Bands

Purpose: Create upper and lower ATR-based bands.

$$Upper = \frac{High + Low}{2} + k \times ATR(n)$$ $$Lower = \frac{High + Low}{2} - k \times ATR(n)$$

Where:

$$k$$ = Multiplier
$$n$$ = ATR period

What This Measures: Volatility-adjusted price bands

Step 2 — Apply Flip Logic

Purpose: Determine which band is active based on trend direction.

If $$Close > Supertrend_{prev}$$: Supertrend = Lower Band (uptrend) If $$Close < Supertrend_{prev}$$: Supertrend = Upper Band (downtrend)

What This Measures: Current trend direction and support/resistance level

Compact Formula Summary

$$Upper = (H+L)/2 + k \times ATR(n)$$ $$Lower = (H+L)/2 - k \times ATR(n)$$ Flip when price crosses Supertrend

Defaults: Period = 10, Multiplier = 3.0

Complete Calculation Example

With ATR = 2.0, Multiplier = 3, Midpoint = 45: Upper = 45 + 3×2 = 51 Lower = 45 - 3×2 = 39 If in uptrend, Supertrend = 39 (support). Price below 39 → flip to downtrend, Supertrend = 51.

Key Takeaways from the Example

Multiplier controls sensitivity: Higher = fewer flips, lower = more responsive
ATR adapts: Bands widen in volatile markets, narrow in calm ones
Clean signals: No ambiguity — trend is either up or down