Sprint 2 is complete. With Supertrend, the second and final strategy from this sprint is live — one of the most popular trading strategies on TradingView, and one for which lots of charts exist online but barely any clean backtest data.

We now have both.

What Supertrend does

Supertrend is a hybrid trend-following / volatility indicator. It wraps the price in ATR-based bands and uses a ratchet logic: the active stop level only moves with the trend, never against it — until the price crosses through, at which point the line flips to the opposite side.

Math per candle:

hl2          = (high + low) / 2
atr          = ATR(period)  ← Wilder smoothing by default
upperBand    = hl2 + multiplier × atr
lowerBand    = hl2 - multiplier × atr

The raw bands are then turned into final bands with the ratchet rule:

• finalUpper only ratchets down (tighter to price) when the previous close was below
• finalLower only ratchets up (tighter to price) when the previous close was above

From that follows the trend direction:

• close > prevFinalUpper → trend up (active stop level is finalLower)
• close < prevFinalLower → trend down (active stop level is finalUpper)
• Otherwise trend stays whatever it was

Signals:

• BUY when direction flips from down to up
• SELL when direction flips from up to down

Why it's so popular

Three reasons:

Visually beautiful. A single colored line that flips from green to red and back. No oscillator, no histogram, no overlay zoo. You see immediately: am I in an uptrend or a downtrend?

Intuitive ratchet logic. "The stop moves with the trend" — most traders understand that immediately. Matches the psychological expectation of a trailing stop.

Default 10/3.0 works passably on many markets without tuning. Which means new traders try it, see something that works, recommend it — self-reinforcing loop.

Result: high search volume for "Supertrend backtest" online. But most sources give you a chart screenshot, maybe a YouTube video with cherry-picked examples. We give you the actual backtest engine.

Two ATR methods to choose from

• Wilders (default): classic ATR with Wilder smoothing — slower, more stable. Matches the original Supertrend formula and what 99% of TradingView indicators show. Use this if you want to backtest against what other traders see on their charts.

• True Range (EMA): faster reaction to volatility changes. More sensitive, more trade signals, more whipsaw-prone. Try this if you explicitly want a more reactive variant.

The daily snapshot pipeline only runs the Wilders default — that's the comparison reference.

Comparison vs Keltner Channel Breakout

Both strategies use ATR-based bands. The difference:

Keltner places its bands at a fixed distance from a moving average and signals a breakout when close crosses the upper band. The bands move freely with the average.

Supertrend ratchets. When you're long, the lower band (your active stop level) creeps up to price as the uptrend continues. It never falls back. Keltner doesn't do that.

Net effect:

• Supertrend gives back less on rapid reversals (because the trailing stop tightened during the up move)
• But Supertrend enters later (because the flip requires the price to cross the previous ratcheted upper band, not just any upper band)

Which is better? Depends on market regime. Daily pipeline runs both, direct comparison from the data coming in ~3 weeks.

Multiplier as the dial

The multiplier parameter is the most important lever:

• 3.0 (default) = balanced, ~10-20 trades per year on BTC 1D
• 5.0 = wide bands, few trades, high drawdown tolerance, longer holds
• 1.5 = tight bands, many trades, fast whipsaws

On weekly charts go larger (4-5). On intraday go smaller (1-2). Default is tuned for daily charts.

Where available

Pro+ feature, live now at /dashboard/crypto:

• 2 numeric inputs (ATR period + multiplier) + dropdown for ATR method
• All standard filters (200 WMA, ATR Volatility, Altcoin Season, Bullmarket Gauge, Min Profit Guard) combinable
• Works as Live Alert and in the Gauge
• Strategy Library with pseudo-code + FAQ at /strategies/supertrend

Sprint status

Sprint 2 is complete:

• ✅ bb_rsi (mean-reversion with strict entry)
• ✅ supertrend (trend with ratchet bands)

Sprints 1 + 2 together built in 2 days:

• EMA Cross (trend)
• MACD Cross (momentum)
• BB Squeeze (volatility breakout)
• BB+RSI (mean-reversion)
• Supertrend (trend with trailing stop)

Platform total: 18 strategies in engine + library, 16 in the daily pipeline.

Daily snapshots running all in parallel. The coverage database fills up. In ~3 weeks we'll have enough data for the most interesting comparisons:

• EMA Cross 9/21 vs Golden Cross 50/200 — which beats B&H more often?
• MACD Cross vs OBV-MACD — does volume beat pure price?
• BB Squeeze vs Keltner Breakout — compression filter vs direct breakout?
• BB+RSI vs RSI/OB-OS — strict entry vs loose entry?
• Supertrend vs Keltner Breakout — ratchet logic vs free bands?

Follow-up post in ~3 weeks once the data is mature.