How Supertrend works
Supertrend uses the Average True Range (ATR), a measure of how much price usually moves per candle. It draws a band a multiple of ATR away from the middle of each candle: below price in an uptrend, above it in a downtrend. The band only moves in the trend’s direction. When a candle closes through it, the trend flips. The default settings are ATR length 10 and multiplier 3; a smaller multiplier hugs price more closely and flips more often.
The rules we tested
- Long: at the close of the candle where Supertrend (10, 3) flips up.
- Short: at the close where it flips down.
- Exit: the next flip closes the trade and opens one the other way.
- 1R: the distance from entry to the Supertrend line at entry. The exit is the closing flip, not a stop order, so a loss can be a little bigger than 1R.
Results: six years, six coins, four timeframes
| Chart | Trades | Win rate | Average win | Average loss | Average R a trade | Max drawdown | Longest losing run | Years positive |
|---|---|---|---|---|---|---|---|---|
| 15 min | 30,186 | 31.7% | +1.50R | −0.79R | −0.06R | 1995R | 45 | 1 of 7 |
| 1 hour | 7,400 | 34.5% | +1.54R | −0.74R | +0.05R | 147R | 34 | 5 of 7 |
| 4 hours | 1,841 | 36.8% | +1.70R | −0.71R | +0.18R | 45R | 22 | 6 of 7 |
| 1 day | 296 | 41.6% | +3.35R | −0.69R | +0.99R | 17R | 10 | 5 of 7 |
Per year on 4-hour charts: 2020 +89R · 2021 +99R · 2022 +17R · 2023 +33R · 2024 +75R · 2025 +18R · 2026* −3R. Per coin: BTC +0.20R · ETH +0.16R · SOL +0.14R · XRP +0.13R · BNB +0.22R · DOGE +0.21R.
| Chart | 2020–2023 | 2024 – Sep 2026 | Longs | Shorts | Coins positive |
|---|---|---|---|---|---|
| 1 hour | +0.06R | +0.04R | +0.14R | −0.04R | 5 of 6 |
| 4 hours | +0.23R | +0.11R | +0.40R | −0.04R | 6 of 6 |
| 1 day | +1.70R | +0.19R | +2.07R | −0.06R | 6 of 6 |
What the numbers say
- Very even across coins: on 4-hour charts every coin made between +0.13R and +0.22R a trade. That spread is what you’d hope for from a real effect rather than luck on one market.
- It got weaker: +0.23R a trade in 2020–2023 on 4-hour charts, +0.11R since, and 2026 so far is slightly negative.
- Daily charts made the most per trade (+0.99R), but mostly in 2020–2021; since 2024 it’s +0.19R.
- 15-minute charts lost in six of seven years.
- Longs did the work (+0.40R vs −0.04R on 4-hour charts).
Crypto rose a lot between 2020 and 2026, so trend-following strategies earned most of their R on longs. A market that falls or goes sideways for years would give a different result. Past results don’t predict future ones.
Which Supertrend settings?
We tested only the default (10, 3). A lower multiplier, such as 2, flips sooner and gives more signals and more whipsaws; a higher one, such as 4, stays in trends longer but gives back more at each exit. Many traders use Supertrend as a trailing stop for trades they found another way, rather than as a stop-and-reverse system. If you change the settings, test them on a period you didn’t use to choose them.
The rule vs your own judgement
A backtest measures the rule, not the trader. Most people who use Supertrend don’t follow it like a machine: they book part of the profit near a big level, skip a choppy day, or wait for a cleaner candle. That can make the result better or worse than the numbers above. On average it makes it worse: SEBI’s study of Indian F&O traders found that 93% of individual traders lost money over the three years to March 2024.
The way to find out which one you are is to measure it. Log every trade you take with this strategy under one strategy tag in your journal, note when you overrode the rule and why, and after 50 or more trades compare your average R with the rule’s. If your judgement adds R, keep it. If it costs R, follow the rule more closely. Our guide on how to journal trades shows what to record.
How to test it yourself
- Write the rules down exactly as above, or with your own changes.
- Open a chart with Supertrend (ATR 10, multiplier 3). In Profit Prism’s PPM Chart (included with every plan) it’s in the Indicators list, and Bar Replay lets you step through history one candle at a time without seeing what comes next.
- Take every signal the rules give, including the ones you don’t like, and record entry, stop, exit and R. Our free trading journal template does the maths.
- After 50–100 trades, compare your average R per trade with the table above, then read how to backtest a trading strategy for the mistakes to avoid.
How we tested it
- Markets: BTC, ETH, SOL, XRP, BNB and DOGE USDT perpetual futures (public exchange candles), each from its first candle; trades counted from 1 January 2020 to 30 September 2026.
- Rules: the textbook settings above, chosen before we saw any result and never tuned. One trade at a time per coin; a trade still open on 30 September 2026 isn’t counted.
- Fills: entries at the close of the signal candle. A stop is a stop order: it fills at the stop, or at the open if a candle gaps through it. If one candle touches both the stop and a target, we count the stop.
- Costs on every trade: 0.05% exchange fee and 0.02% slippage on each side, plus the real funding payments while the trade was open.
- Results in R: 1R is the distance from entry to the first stop, so a +2R trade made twice what it risked. This lets BTC at 60,000 and DOGE at 0.20 sit in one table.
- Two periods: 2020–2023 and January 2024 – September 2026, to see whether the result lasted.
The test code is ours and the data is public, so the numbers can be checked. This is crypto data only: we don’t have licensed NSE data, so treat Nifty and stock results as untested.
Frequently asked questions
What is the best Supertrend setting?
The default is ATR period 10 and multiplier 3, which is what we tested. Lower multipliers flip more often; higher ones flip less. We didn’t tune the settings, so we can’t say another one is better.
Does the Supertrend strategy work?
In our six-year crypto test it was positive on 1-hour, 4-hour and daily charts after costs (+0.18R a trade on 4-hour charts) and lost on 15-minute charts. Its results were smaller from 2024 than in 2020–2023.
Is Supertrend good for intraday trading?
Not on 15-minute charts in our test: it lost 0.06R a trade after costs. Short-chart signals are small compared with fees and slippage.
What is the win rate of Supertrend?
About 36.8% on 4-hour charts in our test, the highest of the trend-following strategies we tested.
Can I use Supertrend as a stop loss?
Yes. Many traders enter for other reasons and exit when Supertrend flips, which works as a trailing stop that follows volatility. See our trailing stop loss guide for other ways to trail a stop.
See your own numbers
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