Supertrend: Which side of the line is price on?
How the Supertrend line follows the trend, what a red-to-green flip signals, and why Indian traders use it as a trailing stop-loss.
Supertrend is a line that follows the trend
Supertrend draws one line on the price chart, a set distance from price based on how much the stock usually moves in a day (its ATR). It is one of the most popular indicators among Indian traders.
What to look for
- Green line under price: uptrend.
- Red line above price: downtrend.
- When price closes through the line, it flips colour and side. That flip is the signal.
Many traders use the line as a trailing stop-loss: stay in while price is above the green line, get out if it closes below.
At the right of the chart the Supertrend line switched from red above price to green below it. What does that signal?
- Nothing, the colour change is random
- The downtrend has likely ended and the trend is turning up
- The stock is about to crash
Show the answer
The downtrend has likely ended and the trend is turning up. A flip to green means price closed above the red line, which had been tracking the downtrend. Traders read it as the trend turning up.
Supertrend as a trailing stop
After a long fall, price closed above the red line and Supertrend flipped green near ₹448. Traders who follow it buy the flip and keep a stop-loss at the green line, moving it up as price rises.
Supertrend lags in sideways markets and can flip back and forth. It works best when a real trend starts.
Practise Supertrend, free
Reading about it is step one. In MarketSeekho you see a real NSE chart with the future hidden, call Bull or Bhalu, say why, and get graded on your reasoning, not luck.
Common questions
What is Supertrend?
Supertrend draws one line on the price chart, a set distance from price based on how much the stock usually moves in a day (its ATR). It is one of the most popular indicators among Indian traders.
What should I look for with Supertrend?
Green line under price: uptrend. Red line above price: downtrend. When price closes through the line, it flips colour and side. That flip is the signal.
How can I practise reading Supertrend for free?
MarketSeekho has a free four-page chapter on Supertrend (learn, answer a question, spot it on a chart, then make a call) and an unlimited Supertrend practice game graded on your reasoning. No sign-up or money needed.