Supertrend System

Start with ATR Period 10 and Multiplier 3.0 on the daily timeframe. These are robust default settings that work across most stocks. Adjust only after gaining experience with these defaults.

Yes, enter on the next candle open after the flip. Waiting for additional confirmation often means missing the move or entering at worse prices. The Supertrend flip IS your signal.

This is called a whipsaw. They happen. If Supertrend flips back in your direction, take the new signal. The system is designed so that winning trends offset multiple small whipsaw losses.

For daily Supertrend, check once per day after market close. Update your stop-loss to the new Supertrend level. For intraday timeframes, check at the end of each bar.

Supertrend works best on liquid, trending stocks. Avoid very low-volume stocks or those in prolonged sideways ranges. In Singapore, it works well on DBS, OCBC, UOB, STI ETF, and other liquid counters.

Add an ADX filter - only take Supertrend signals when ADX > 25. You can also increase the multiplier (e.g., from 3.0 to 3.5) for wider bands. Accept that some whipsaws are unavoidable.

Generally no. Consistent settings across stocks simplify trading and prevent over-optimization. If you must adjust, use wider multipliers for more volatile stocks and tighter for less volatile ones.

Use weekly Supertrend for trend direction and daily for entry timing. Only take daily buy signals when weekly is green. This filters many false signals and aligns you with the bigger trend.

Add when price pulls back to touch the Supertrend line and bounces. This gives you a defined risk entry (stop at Supertrend) while adding to an established trend. Limit additions to 50% of original size.

If the stock gaps past the Supertrend line, consider it triggered even if the line wasn't 'hit.' For buy signals that gap up significantly, you may enter at the gap open or wait for a pullback entry.

Calculate the ratio of current ATR to average ATR (e.g., 20-period average). Multiply the base multiplier by this ratio. When volatility is high, bands widen automatically. When low, they tighten.

Supertrend is a trend-following indicator, not ideal for mean reversion. However, you can use it inversely - in confirmed ranges (ADX < 20), Supertrend flips become fade signals. This is advanced and risky.

Calculate the percentage of stocks with green Supertrend. Above 70% suggests bullish market conditions - increase equity exposure. Below 30% suggests bearish conditions - reduce exposure or hedge.

Use walk-forward analysis: optimize on one period, test on the next, repeat. Use realistic assumptions for slippage (0.1-0.2%) and commissions. Test across multiple market regimes. Avoid over-optimization.

Use Supertrend direction for directional option trades. Green = buy calls or sell puts. Red = buy puts or sell calls. Place short option strikes at or beyond the Supertrend line for logical support/resistance levels.