Supertrend Indicator with Trend Color Change - indicator for MetaTrader 5

Supertrend Indicator with Trend Color Change

The idea behind it

Supertrend is a popular trend-following tool that works as a trailing stop. It builds two bands around the price at a distance of multiplier x ATR and follows only one of them at a time: the lower band in an up-trend and the upper band in a down-trend. A band can move only in the direction of the trend, so the line trails the price and does not step back.

When the close crosses the active line, the trend is considered changed: the indicator switches to the opposite band, the line jumps to the other side of the price and its color changes. Because the distance depends on ATR, the indicator adapts to volatility.

The ATR (Wilder smoothing) is calculated inside the indicator, so no indicator handles are needed. On each tick only the last bar is recalculated, and the whole history is processed only once.

How to interpret it

• Up-trend line (solid, white by default) - drawn below the price. It acts as dynamic support and as a trailing stop level for long positions.
• Down-trend line (dashed, gray by default) - drawn above the price. It acts as dynamic resistance and as a trailing stop level for short positions.
• Color change - the line changes color and moves to the other side of the price when a candle closes beyond it. This is the trend change signal.
• Buy arrow - drawn on the bar where the trend changes from down to up.
• Sell arrow - drawn on the bar where the trend changes from up to down.
• Info label (top-left corner) - shows the settings and the current trend direction (UP or DOWN).

Supertrend works best in trending markets. In a sideways market it can change direction often and produce false signals, so it is best used with a higher-timeframe filter or other confirmation.

External variables (inputs)

Recommended use

• Works on any symbol and timeframe. The defaults (ATR 10, multiplier 3.0) are a common starting point; use a smaller multiplier for faster, more sensitive signals and a larger one for fewer, more reliable ones.
• Values and arrows of closed bars do not change. On the current, still forming bar the line and an arrow can appear or disappear, because the signal depends on the current close. Wait for the bar to close before acting.
• Alerts are generated only for the last closed bar, once per bar, and never for historical signals when the indicator is attached.
• Do not use the arrows as a complete trading system: sideways markets produce whipsaws. The line itself is most useful as a trailing stop.
• The indicator needs more bars than the ATR period to start drawing.
• It is a chart indicator only and does not trade, so it works the same on netting and hedging accounts.
• The info label uses the prefix Supertrend_ and is removed when the indicator is deleted from the chart.

Fig. 1. SupertrendColor on an H1 chart with default settings (black and white image per Code Base guidelines).