Supertrend (TradingView Implementation): hl2 Plus or Minus a Multiple of ATR, With a Ratcheting Band and a Close-Based Flip

Supertrend is "a trend-following indicator based on Average True Range" (ATR) whose "single line combines trend detection and volatility", and which "can be used to detect changes in trend direction and to position stops." The same page attributes it: "The Supertrend indicator was created by Olivier Seban." That is TradingView's attribution; this page has not checked it against a record by the creator. No year is given there, and this page does not supply one.^[3]

The bands are built from the midpoint of the bar, not from the close. hl2 = (high + low) / 2, then basicUpperBand = hl2 + (multiplier x ATR) and basicLowerBand = hl2 - (multiplier x ATR). Two inputs control it: atrLength, "the lookback length for the ATR calculation", and multiplier, "what the ATR is multiplied by to offset the bands from price." No default values for either are stated on that page.^[3]

The bands then ratchet — they do not simply follow the basic formula each bar. The upper band takes the new basic value only when basicUpperBand is below the previous upper band, or the previous close was above it; otherwise it keeps the previous value. The lower band mirrors that rule. The line that is drawn is whichever band the current direction selects: the lower band in an uptrend, the upper band in a downtrend.^[3]

The flip is a close beyond the opposite band, not a touch. Until ATR has a value the direction starts as a downtrend. If the line was the upper band, the direction turns up only when the close is above the upper band. If the line was the lower band, it turns down only when the close is below the lower band. The page describes the visible result as the curve changing colour after a close on the other side.^[3]

There is no encyclopedic entry for the name. On 2026-10-08 the English Wikipedia search page reported that the page "Supertrend" does not exist; its full-text search returned two results, neither about the indicator. This page did not search for a regulatory definition. What does exist is the documentation of platforms that implement it, and this page uses TradingView's, which describes the indicator its own product computes. That is a primary source for that implementation, not a standard that other implementations are obliged to follow.^[3][4]

The two halves of this page therefore rest on different kinds of source. The band arithmetic comes from a vendor describing its own product. The volatility component, ATR, has a reference definition and is reported below from it. An earlier version of this page stated that no reference definition of the name had been found and left the midpoint, the multiplier and the flip rule as unestablished; that was a failure of search, not an absence of documentation, and it is corrected here.^[1][3]

The component carries an explicit disclaimer that matters for an indicator marketed as a trend tool. ATR "is a technical analysis volatility indicator originally developed by J. Welles Wilder, Jr. for commodities", and "does not provide an indication of price trend, simply the degree of price volatility." So the band width says how much price has been moving, not which way. Any directional reading comes from the midpoint and the flip rule, not from ATR.^[1]

True range is the day range extended: high minus low, widened "to yesterday's closing price if it was outside of today's range." The article explains the intent — "Large or increasing ranges suggest traders prepared to continue to bid up or sell down a stock", while "Decreasing range suggests waning interest." That is a statement about participation, not about direction.^[1]

This is worth stating because it is easy to assume a volatility band has no memory. The source says "The average true range is an N-period smoothed moving average (SMMA) of the true range values", and "Wilder recommended a 14-period smoothing." SMMA is the same smoothing family the RSI article describes as "the exponentially smoothed moving average with α = 1 / n".^[1][2]

So an ATR-based band carries the same data-length dependency discussed for RSI: because the average has no fixed window, the value depends in part on how much history preceded the calculation. How much the resulting band positions differ for a given instrument and history length is not established here — the smoothing constant describes the weight of old data, not the size of the difference in the output. The article also notes the first ATR value "is calculated using the arithmetic mean formula", so the seeding rule differs from the recursion that follows it.^[1][2]

One property distinguishes ATR from a log-return standard deviation. "Since true range and ATR are calculated by subtracting prices, the volatility they compute does not change when historical prices are back-adjusted by adding or subtracting a constant to every price." The article contrasts this with "the standard deviation of logarithmic price ratios", which it says is not invariant to the addition of a constant. The property holds for that kind of adjustment — adding or subtracting the same constant to every price, which the article says is often used when splicing monthly futures contracts into a continuous series.^[1]

Implementations may still differ. TradingView's page defines the indicator as one platform computes it; it does not establish that other platforms use the same midpoint, the same ratchet, or the same flip condition. Anyone citing a Supertrend value should say which implementation produced it. Default values for atrLength and multiplier are not stated on that page, so the commonly cited settings are not sourced here.^[3]

Not established: the year Supertrend was created, whether its signals are profitable — source [3] says the indicator "generates false signals" at times but gives no measurement — and how the band positions differ across history lengths. Wilder's 1978 book and Investopedia were not consulted. The sources are of different kinds. TradingView's description of its formula, ratchet and flip rule is the publisher's primary record of its own implementation. What is said here about Wilder and the history of ATR and RSI is Wikipedia's secondary account. What is said about memory length is this page's inference from the formula. No statement here is confirmed by two independent institutions. As of 2026-10-08.^[1][2][3]