BP Supertrend Strategy

Supertrend is an ATR-based trend indicator that provides clear signals with built-in trailing stop. It's excellent for BP because BP trends with oil, and Supertrend captures these moves while automatically managing the stop loss.

Default settings are ATR Period 10 and Multiplier 3.0. This means Supertrend bands are 3× ATR from the price midpoint. These settings work well for BP on daily and 4-hour timeframes.

Enter when Supertrend flips direction. Wait for the candle to CLOSE beyond Supertrend, then enter at the next bar's open. Bullish flip = long entry. Bearish flip = short entry or exit long.

Stop is at the Supertrend line plus a small buffer (0.3× ATR). The Supertrend automatically trails as price moves favorably, so your stop tightens without manual adjustment.

Exit when Supertrend flips opposite direction. For a long trade, exit when price closes below Supertrend (bearish flip). This can also be an entry for a short trade in a reversal system.

ADX measures trend strength. Requiring ADX > 25 for entries filters out ranging markets where Supertrend whipsaws frequently. This improves win rate by only trading when genuine trends exist.

Apply Supertrend to oil (CL or BZ) with same settings. If oil Supertrend agrees with BP Supertrend direction, signal is confirmed (full size). If divergent, reduce to half size or skip.

Weekly Supertrend sets major bias. Daily provides trading signals. Only take Daily signals aligned with Weekly. Example: Weekly bullish + Daily bullish flip = strong long signal.

High volatility (ATR > 125% of 50-day average): use multiplier 3.5. Low volatility (< 75%): use 2.5. Normal: use standard 3.0. Higher multiplier = wider bands = fewer whipsaws in volatile conditions.

Avoid new entries 3-5 days before earnings. Consider reducing or closing existing positions before earnings. After earnings, wait for new confirmed Supertrend signal before re-entering.

Calculate TR, ATR(10), HL2, Upper/Lower bands. Track Supertrend state (Upper or Lower). Detect flips when direction changes. Add ADX filter (> 25), oil filter (aligned), position sizing (1.5% risk based on stop distance). Exit on opposite flip.

Buy calls (or call spreads) on bullish flip, puts on bearish flip. Use 30-45 DTE to match typical holding period. Exit options when Supertrend flips opposite - don't hold until expiration if signal fails.

Score confirmations: XLE Supertrend (+1), Oil Supertrend (+1), Shell (+1), Exxon (+1), Chevron (+1). Score 4-5 = very high conviction. Score 2-3 = standard. Score 0-1 = low conviction, consider skipping.

Trending (ADX > 30): standard parameters, full sizing. Ranging (ADX < 20): strict ADX filter, half size or skip. Transitioning: half size, patience, wait for new regime to establish.

Per-trade: 1.5% risk. Max BP exposure: 25%. Max energy sector: 35%. Max concurrent Supertrend positions: 3. Track win rate, R:R ratio, and profit factor for performance monitoring.