What is the Supertrend indicator?

The idea in one line

Supertrend draws a single line that flips below price in an uptrend and above price in a downtrend — so a flip is your entry or exit cue.

How it's built

It's based on the Average True Range (ATR), a measure of how much a stock typically moves:

• Take the midpoint of each bar (high + low) / 2.
• Add and subtract ATR × factor (TrendWake uses ATR length 10, factor 3.0) to get an upper and lower band.
• The Supertrend line follows the lower band in an uptrend and the upper band in a downtrend. When price closes through it, the trend flips.

Because the bands are built from ATR, Supertrend automatically widens in volatile markets (fewer false flips) and tightens in calm ones.

How TrendWake uses it

• A bullish flip logs a LONG signal; a bearish flip logs an EXIT.
• Signals run on both daily and 15-minute bars.
• A regime filter (SPY vs its 200-day average) gates longs — TrendWake favors longs when the broad market is healthy and stands aside when it isn't.

Supertrend won't call tops and bottoms — nothing does. What it does well is keep you in a trend while it lasts and get you out when it breaks.

Simulated results. Educational only — not financial advice.