Supertrend
A trailing band plotted at a multiple of average true range from the midpoint of price, flipping sides when price crosses it.
Formula
Upper Band = (High + Low) / 2 + Multiplier x ATR; Lower Band = (High + Low) / 2 - Multiplier x ATR
Unit
₹
In depth
Supertrend is popular on Indian retail platforms, typically with a 10-period ATR and a multiplier of 3. Because the band width scales with average true range, the stop automatically widens in volatile conditions and tightens in quiet ones, which is a genuine improvement over a fixed-rupee or fixed-percentage stop. Like Parabolic SAR it is always in the market, so it whipsaws in ranges and its published performance is highly sensitive to the multiplier chosen. It is a volatility-scaled trailing level, not a forecast, and this entry makes no directional claim.
Worked example
With high ₹512, low ₹494 and ATR ₹14 at a multiplier of 3, the midpoint is ₹503 and the bands are 503 + 42 = ₹545 and 503 - 42 = ₹461. Halving the multiplier to 1.5 would put the lower band at ₹482 — a very different stop from the same data.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Supertrend” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.