What Is the Supertrend Indicator?
Supertrend is a trend-following indicator that plots a single line on your chart — green when the trend is up, red when the trend is down. It was created by Olivier Seban and is built into Zerodha Kite, TradingView, and MetaTrader 5.
The formula uses ATR (Average True Range) to calculate a dynamic support/resistance level. When price closes above the Supertrend line, the indicator turns green (buy). When price closes below, it turns red (sell). No ambiguity — it's the clearest trend indicator available.
Why it's popular in India: Zerodha and Angel One both feature Supertrend prominently in their charting tools. Roughly 40% of Indian intraday traders use it (based on Zerodha Streak's most-used indicators list). It's the go-to indicator for Nifty and Bank Nifty intraday trading.
Supertrend Settings: What Actually Works
Default settings are Period: 7, Multiplier: 3. But these are optimized for US stocks. For Indian markets, different settings work better:
| Instrument | Timeframe | Period | Multiplier | Why |
|---|---|---|---|---|
| Nifty Futures | 5-min | 10 | 2 | Reduces whipsaws in first hour volatility |
| Bank Nifty | 5-min | 10 | 3 | Bank Nifty is more volatile — needs wider multiplier |
| Nifty Futures | 15-min | 7 | 3 | Default works well on 15-min for swing signals |
| Stocks (Reliance, TCS) | 15-min | 10 | 3 | Individual stocks need longer period to filter noise |
| EUR/USD (Forex) | 5-min | 12 | 2.5 | Forex trends are smoother — slightly lower multiplier works |
The rule of thumb: Higher multiplier = fewer signals but higher accuracy. Lower multiplier = more signals but more whipsaws. For intraday on Indian markets, Period 10, Multiplier 2-3 is the sweet spot.
Strategy 1: Basic Supertrend Buy/Sell
The simplest approach — and it works surprisingly well on trending days.
Rules:
- Apply Supertrend (10, 2) on Nifty 5-minute chart
- BUY when Supertrend turns green (candle closes above the line)
- SELL when Supertrend turns red (candle closes below the line)
- SL: the Supertrend line itself (it acts as dynamic support/resistance)
- Target: hold until the indicator flips color. No fixed target.
Win rate: ~50-55% on 5-min Nifty. The win rate is mediocre, but winners are 2-3x larger than losers because you ride the trend until it flips. Net expectancy is positive.
Best days: Monday and Tuesday (trending). Worst days: Wednesday expiry (choppy) and Thursday post-expiry (mean reversion).
Strategy 2: Supertrend + VWAP Confluence
The strongest Supertrend setup. Combines trend direction with institutional fair value.
Rules:
- Apply Supertrend (10, 2) AND VWAP on Nifty 5-min chart
- BUY only when: Supertrend is green AND price is above VWAP
- SELL only when: Supertrend is red AND price is below VWAP
- Entry: when price pulls back to VWAP while Supertrend remains green (buy), or rallies to VWAP while Supertrend remains red (sell)
- SL: the Supertrend line. Target: previous swing high/low
Why this is better: The basic Supertrend gives many false signals in choppy markets. Adding VWAP as a filter eliminates 40% of losing trades. The price must agree with both the trend (Supertrend) and institutional positioning (VWAP). When both align, the move follows through 65%+ of the time.
For more on the VWAP strategy specifically, we have a dedicated guide with IST timing.
Strategy 3: Multi-Timeframe Supertrend
Used by traders who want higher accuracy at the cost of fewer trades.
Rules:
- Apply Supertrend on 15-min chart (7, 3) — this determines the trend direction
- Apply Supertrend on 5-min chart (10, 2) — this determines the entry timing
- Only take BUY signals on 5-min when 15-min Supertrend is also green
- Only take SELL signals on 5-min when 15-min Supertrend is also red
- If 15-min and 5-min disagree — no trade. Wait for alignment.
Win rate: ~60-65%. You'll get 2-4 trades per day instead of 6-8, but each trade has higher probability. This is the approach I'd recommend for traders with day jobs who can't monitor every 5-min candle — check 15-min for direction before market open, then set alerts on 5-min for entry.
When Supertrend Fails (And What to Do)
Supertrend is a trend-following indicator. It fails when the market is not trending:
- Range-bound days (Wednesday expiry): Nifty moves 50-80 points up and down without direction. Supertrend flips green-red-green-red every 30 minutes. Solution: check India VIX. If VIX is below 12, expect range — don't use Supertrend, use options strategies instead.
- Gap openings: If Nifty gaps 100+ points at open, Supertrend might already be green from the gap but the gap fills during the first hour. Solution: wait until 9:45 AM before acting on Supertrend signals. Let the gap settle.
- News events (RBI, Budget, FOMC): Sudden moves whipsaw the indicator. Solution: turn off Supertrend 30 minutes before major events. Use price action only during news.
How to Set Up Supertrend on Your Platform
Zerodha Kite: Charts → Studies → search "Supertrend" → set Period: 10, Multiplier: 2 → Apply
TradingView: Indicators → search "Supertrend" → use the built-in (by KivancOzbilgic) → Input: Factor 2, ATR Period 10
MetaTrader 5: Insert → Indicators → Custom → search Supertrend (may need to download from MQL5 marketplace — it's not built-in on MT5 like it is on Indian platforms)
If you trade international markets through Exness or XM, TradingView has the best Supertrend implementation — use TradingView for analysis and MT5 for execution.