Free Strategy Guide
Supertrend Trading Strategy For Gold, ES, NQ, EURUSD And Bitcoin
Settings, rules and a simple filter for using the Supertrend on fast charts, with the stop and exit worked out before you enter.
A Supertrend trading strategy starts with one line on your chart. When price is above the line, the trend is up. When price is below it, the trend is down. That is the whole signal. It is easy to read, which is why the Supertrend is so widely searched, and it is also why it needs rules around it.
This guide covers how the Supertrend is calculated, which settings to start with, and how to use it as a direction filter for ProvenSignals alerts on XAUUSD, ES, NQ, EURUSD and BTC. It does not promise results. It gives you a routine you can repeat: take the alert only when the Supertrend agrees, put the stop at a real level and close after a 3-5 candle move. If the alert format is new to you, start with how to read trading signals.
How The Supertrend Indicator Works
The Supertrend is a trend-following indicator built on the Average True Range, or ATR. ATR measures how far price typically moves in one candle, so the Supertrend line sits further from price when the market is volatile and closer when it is quiet. It was created by Olivier Seban.
The calculation is short. Take the middle of each candle, which is the high plus the low divided by two. Add the ATR times a multiplier to get an upper band, and subtract it to get a lower band. In an uptrend the line follows the lower band and can only rise. In a downtrend it follows the upper band and can only fall. When the close crosses the line, the trend flips and the line jumps to the other side.
Most platforms colour the line, with green below price in an uptrend and red above price in a downtrend. Colours differ between platforms, so judge it by where the line sits against price.
Supertrend Settings For Fast Charts
The Supertrend has two inputs: the ATR length and the multiplier. A common default is an ATR length of 10 and a multiplier of 3. A shorter length or a smaller multiplier pulls the line closer to price, so the trend flips sooner and more often. A longer length or a larger multiplier pushes the line away, so it flips less often and later.
| Setting | Where the line sits | Effect |
|---|---|---|
| Length 10, multiplier 3 | Default distance | A balanced starting point |
| Smaller multiplier, for example 2 | Closer to price | Earlier flips, and more of them |
| Larger multiplier, for example 4 | Further from price | Fewer flips, later signals |
On 1-minute and 5-minute charts, start with the default. Watch it on your five markets, then change one setting at a time. Whatever you settle on, use the same setting on every trade. If you keep changing it, you cannot tell what is working.
The Supertrend Strategy Step By Step
A ProvenSignals alert gives you three things: the market, the direction and the chart timeframe, for example XAU/USD Buy Signal, Chart 1-minute. It does not include an entry, a stop or targets. You open the same chart and manage the trade yourself. The Supertrend adds a trend check that you run yourself on that chart.
- Open the chart named in the alert and add the Supertrend with the default settings.
- For a buy alert, check that price is above the line. For a sell alert, check that price is below it.
- If the Supertrend agrees with the alert, the trade passes the filter. If it disagrees, skip the alert.
- Find the stop level: below recent support for a buy, above recent resistance for a sell.
- Run the 10 second check to see whether the stop fits a normal 3-5 candle move.
- Size the position from the stop, then close after a 3-5 candle move in your direction.
| Alert | Supertrend | Action |
|---|---|---|
| Buy | Price above the line | Passes the filter, go on to the stop |
| Buy | Price below the line | Skip the alert |
| Sell | Price below the line | Passes the filter, go on to the stop |
| Sell | Price above the line | Skip the alert |
The filter does not make an alert better or worse. It keeps you out of trades that run against the trend on your own chart, and it is a rule you can write down and apply the same way every time.
Where The Stop And Exit Go
The indicator never replaces the stop. On a buy, the stop goes below recent support, which is the low of the last few candles or a clear swing low on the alert's timeframe. On a sell, it goes above recent resistance. Leave a small gap beyond the level so a brief touch does not close the trade, then measure the distance from entry to stop. Never widen the stop after you enter. If the stop feels too far away, reduce the position size instead.
The exit is a count, not a feeling. After entry, count candles on the alert's timeframe and close after about a 3-5 candle move in your direction. On a 1-minute chart that is roughly 3 to 5 minutes. A flip of the Supertrend line is not part of the exit rule. Do not hold on because the line has not flipped, and do not move the stop away because it has. The full method is in the guide on when to exit a trade.
Before you enter, run the 10 second check. Look at the last 20 candles, estimate how far a typical candle moves, and multiply by 3 to 5. If the stop you need is far bigger than that, skip the trade or wait for a cleaner level. Then size from the stop: risk amount divided by stop distance times the value per point or pip. The position size calculator does the math, and the pip and point value calculator shows what one pip, point or tick is worth at your size.
Using The Supertrend On Five Markets
The routine is the same on every market ProvenSignals covers. Only the units change.
- XAUUSD: gold moves in dollars. A $1 move is $100 per lot, so a stop of a few dollars is a large amount at a large size. Measure it before you click.
- ES and NQ: stops are measured in points. ES is $50 per point and NQ is $20 per point. The micro contracts, MES and MNQ, are one tenth of that, which makes it easier to fit a stop into your risk amount.
- EURUSD: stops are measured in pips. One pip is $10 per standard lot, $1 per mini lot and $0.10 per micro lot.
- BTC: bitcoin trades 24 hours a day, 7 days a week, so there is no session break. Size is in coins and the value of a move is the number of coins times the dollar move.
Check the market sessions clock before you trade. The same number of candles covers more price when a market is busy and less when it is quiet.
Binary Options Supertrend: Why A Real Market Fits Better
Many searches for the Supertrend come from binary options traders, so it is worth being direct. The Supertrend can tell you which side of the line price is on. It cannot tell you where price will be when a fixed timer ends. A binary option pays a fixed amount if you are right and nothing if you are wrong, and the payout is below 100% of the stake. At a 90% payout you need to be right about 52.6% of the time just to break even, before any losing streak. The Supertrend is a trend-following indicator, so its flips are late by design, and on a very short expiry the signal often arrives after the move.
A trade on a real market with a stop works differently. You choose the stop at a level that matters, you choose when to close, and the size comes from the stop. The Supertrend then does the job it is good at, which is filtering direction. If you are coming from binary options, read why a 5 second or 15 second trade is a poor fit and what to do instead.
Where The Supertrend Struggles
The Supertrend works best in a clear trend. In a sideways market price crosses the line again and again, and each flip looks like a new signal. TradingView's own help page for the indicator notes that it can generate false signals at times and suggests using it together with other tools.
A simple guard is the 10 second check. If the last 20 candles are tangled around the line instead of running on one side of it, skip the alert and wait for a cleaner chart. A skipped trade costs nothing.
Frequently Asked Questions
There is no single best one. A simple, repeatable approach is to use the Supertrend as a direction filter. Take a buy alert only when price is above the line and a sell alert only when price is below it, then place the stop at real support or resistance and close after a 3-5 candle move.
A common default is an ATR length of 10 and a multiplier of 3. Smaller values make the line flip sooner and more often, and larger values make it flip later and less often. Pick one setting, use it on every trade and change only one thing at a time.
The Supertrend shows the trend direction, but a binary option needs you to be right about the price at a fixed moment, and the payout is below 100%. At a 90% payout you need to win about 52.6% of trades to break even. A real market trade with a stop and a planned exit avoids the fixed timer.
It plots on any timeframe. Shorter timeframes tend to produce more flips, so the filter and the 10 second check matter more. If the line keeps flipping through the last 20 candles, skip the alert.
On a buy, below recent support. On a sell, above recent resistance. The Supertrend line is a useful reference for where support or resistance sits, but it is not the stop. Never widen the stop after you enter.
XAUUSD, ES, NQ, EURUSD and BTC. Each alert gives the market, the direction and the chart timeframe, with no entry, stop or targets.
More Free Tools
Position Size Calculator
Turn your stop into lots, contracts or coins for gold, ES, NQ, EURUSD and BTC.
Pip & Point Value Calculator
See what one pip, point or tick is worth in dollars at your size.
Market Sessions Clock
Live Sydney, Tokyo, London and New York hours in your own time zone.
Get The Signals
Get free signals on XAUUSD, ES, NQ, EURUSD and BTC. Run the Supertrend filter, set the stop at a real level and size the trade from it with the free calculators.