Supertrend Indicator

Overview

The Supertrend indicator creates a dynamic trend-following system by calculating two bands around price using the Average True Range (ATR) for volatility adjustment. The upper band is calculated as (High + Low)/2 plus the ATR multiplied by a factor, while the lower band uses the same midpoint minus the ATR multiple. These bands act as trailing stop levels that flip based on price action, creating a single line that clearly indicates the current trend direction through color changes - typically green for uptrends when price is above the line, and red for downtrends when price is below.

What makes Supertrend particularly effective is its adaptive nature - the ATR component ensures the bands widen during volatile periods and contract during calm markets, preventing premature signals during normal market fluctuations. The indicator excels in trending markets where it acts as both a trend filter and a trailing stop mechanism, though like most trend indicators, it can generate false signals during sideways or choppy market conditions. Its visual simplicity, combined with firm support and resistance levels, makes it especially popular among traders seeking clear, actionable signals without complex interpretation.

Interpretation & Trading Signals

Example Usage

Code examples will be available once the Rust implementation is complete.