Overview

The ATR & SuperTrend indicator is a next-generation hybrid tool that merges ATR-based trailing stops with the SuperTrend algorithm, then adds EMA crossover strength confirmation on top. The result is an indicator that excels at identifying trend direction, providing dynamic trailing stop levels, and confirming entries with multi-timeframe momentum.

SuperTrend is one of the most widely respected trend-following tools in technical analysis. By combining it with ATR trailing logic and Volensy’s proprietary EMA(20/50) crossover confirmation, this indicator creates a layered system that adapts to volatility while filtering out noise-driven signals.

An optional Heikin Ashi compatibility mode allows traders to apply the indicator to smoothed price data, further reducing whipsaws in choppy markets. This is a premium indicator, available exclusively to Volensy members.

How It Works

The indicator combines three analysis engines into a unified signal system.

Engine 1: SuperTrend Algorithm

The SuperTrend is calculated using a combination of the midpoint price (average of high and low) and the Average True Range:

  • SuperTrend Upper Band = Midpoint + (ATR x Multiplier)
  • SuperTrend Lower Band = Midpoint – (ATR x Multiplier)

The SuperTrend line flips between the upper and lower bands based on price position:

  • When price is above the SuperTrend line, the trend is bullish and the line acts as a dynamic support (trailing stop below price).
  • When price is below the SuperTrend line, the trend is bearish and the line acts as a dynamic resistance (trailing stop above price).

The line color changes accordingly — green during uptrends, red during downtrends — providing an instant visual read on trend direction.

Engine 2: Dual ATR Trailing Stop

In addition to the SuperTrend, the indicator calculates a separate ATR-based trailing stop using its own configurable ATR length and multiplier. This trailing stop:

  • Ratchets upward during long trades (never moves down).
  • Ratchets downward during short trades (never moves up).

This dual-layer approach means you have both the SuperTrend’s trend direction and a separate trailing stop that locks in profits as the trade progresses.

Engine 3: EMA(20/50) Crossover Strength Confirmation

Before any signal fires, the indicator checks the relative position of the 20-period and 50-period Exponential Moving Averages:

  • LONG signals are confirmed when EMA(20) is above EMA(50), indicating bullish momentum alignment.
  • SHORT signals are confirmed when EMA(20) is below EMA(50), indicating bearish momentum alignment.

This prevents the indicator from generating signals against the prevailing trend, a common source of false entries in pure SuperTrend implementations.

Heikin Ashi Compatibility

When enabled, the indicator calculates its signals using Heikin Ashi candle data instead of standard candlesticks. Heikin Ashi candles smooth out price action by averaging open, high, low, and close values, which reduces whipsaws and makes trend identification cleaner. This mode is particularly useful on lower timeframes where price noise is more prevalent.

Note: When using Heikin Ashi mode, the entry and exit prices shown in the info panel are based on Heikin Ashi values, which may differ slightly from actual market prices. Factor this into your real trade execution.

Signal Output

A signal fires when the SuperTrend flips direction AND EMA(20/50) alignment confirms:

  • LONG — SuperTrend flips bullish + EMA(20) above EMA(50).
  • SHORT — SuperTrend flips bearish + EMA(20) below EMA(50).

The standard TP/SL system activates:

  • TP1 — 0.5% from entry
  • TP2 — 1.0% from entry
  • TP3 — 1.5% from entry
  • Stop Loss — 2.0% from entry

Key Features

  • Hybrid SuperTrend + ATR — Combines SuperTrend trend direction with ATR trailing stops for comprehensive trend management.
  • EMA(20/50) confirmation — Signals must align with the EMA crossover state, filtering out counter-trend entries.
  • Heikin Ashi compatibility — Optional smoothed price data mode for cleaner signals in choppy markets.
  • Dynamic trailing stop — The ATR trailing stop ratchets in the trade’s favor, locking in profits as the trend progresses.
  • Visual SuperTrend line — Color-coded line on the chart (green for bullish, red for bearish) provides instant trend identification.
  • Real-time info panel — Displays entry price, PnL, success rate, trade duration, and signal status.
  • Multi-level TP/SL — Three take profit targets and a fixed stop loss.
  • Bar coloring — Candlesticks colored based on signal direction.
  • Configurable alerts — Alerts for SuperTrend flips, signal entries, TP hits, and SL triggers.

Configuration / Settings

| Parameter | Default | Description |
|———–|———|————-|
| SuperTrend ATR Length | 10 | ATR period used for SuperTrend calculation. |
| SuperTrend Multiplier | 3.0 | ATR multiplier for SuperTrend band distance. Higher values make the SuperTrend less sensitive to small price moves. |
| Trailing Stop ATR Length | 14 | ATR period for the separate trailing stop calculation. |
| Trailing Stop Multiplier | 1.5 | ATR multiplier for the trailing stop distance. |
| Fast EMA | 20 | Period for the fast EMA in the crossover confirmation. |
| Slow EMA | 50 | Period for the slow EMA in the crossover confirmation. |
| Use Heikin Ashi | Off | Toggle Heikin Ashi compatibility mode. When enabled, all calculations use Heikin Ashi price data. |
| TP1 Level | 0.5% | First take profit target. |
| TP2 Level | 1.0% | Second take profit target. |
| TP3 Level | 1.5% | Third take profit target. |
| Stop Loss | 2.0% | Maximum loss threshold. |
| Show SuperTrend Line | On | Toggle visibility of the SuperTrend line on the chart. |
| Show Trailing Stop | On | Toggle visibility of the ATR trailing stop line. |
| Show Info Panel | On | Toggle the floating stats panel. |
| Show Bar Colors | On | Toggle candlestick coloring. |

Warning: Setting the SuperTrend Multiplier below 2.0 will make the indicator very sensitive, producing frequent signals in both directions. This can be useful for scalping on higher timeframes but will generate excessive noise on lower timeframes. The default of 3.0 provides a well-tested balance.

Trading Signals

LONG Signal

A green LONG label appears when:

  • The SuperTrend line flips from above price to below price (trend turns bullish).
  • EMA(20) is above EMA(50), confirming bullish momentum alignment.

The SuperTrend line turns green and begins acting as dynamic support. The ATR trailing stop activates below the entry price and ratchets upward as price advances.

SHORT Signal

A red SHORT label appears when:

  • The SuperTrend line flips from below price to above price (trend turns bearish).
  • EMA(20) is below EMA(50), confirming bearish momentum alignment.

The SuperTrend line turns red and acts as dynamic resistance. The trailing stop activates above entry and ratchets downward.

Signal Resolution

The signal remains active until a TP level is hit, the SL triggers, the trailing stop is breached, or a new opposing signal fires.

Best Practices

Recommended Markets

  • Crypto — All major pairs. The adaptive ATR and SuperTrend logic handles crypto’s extreme volatility shifts exceptionally well.
  • Forex — Major and cross pairs. The EMA confirmation filter prevents false signals during low-volatility Asian sessions.
  • Stocks — Trending stocks with clear directional moves. Particularly effective on tech and growth stocks.
  • Commodities — Gold, oil, and agricultural futures. The SuperTrend’s trailing stop nature suits commodity trends.

Recommended Timeframes

  • 15-minute — Active intraday trading with the EMA confirmation keeping signal quality high.
  • 1-hour — Excellent for swing-style intraday trading.
  • 4-hour — High-conviction trend following for multi-day swing trades.
  • Daily — Long-term trend following with very few but highly reliable signals.

Tips

  1. Enable Heikin Ashi on lower timeframes — If you are trading on 5-minute or 15-minute charts and seeing too many whipsaws, enable Heikin Ashi mode to smooth the signal generation.
  2. Use the trailing stop as your exit — While the fixed TP levels provide structured targets, the ATR trailing stop can capture more profit during strong trends. Consider using the trailing stop as your primary exit and TP levels as partial profit targets.
  3. Watch for EMA convergence — When EMA(20) and EMA(50) are very close together (converging), the market is in transition. Signals during convergence are less reliable than signals when the EMAs are clearly separated.
  4. Trend continuation trades — The most powerful signals come when the SuperTrend flips in the same direction as the existing EMA trend. These are trend continuation entries that often lead to extended moves.

Related Documentation

*See also: Indicators Overview*
*See also: Understanding the TP/SL System*
*See also: Using the Info Panel*
*See also: Momentum ATR Filter* — Another ATR-based tool with momentum and volume confluence.
*See also: ZL Trend Signals* — Volensy’s flagship zero-lag trend tool for comparison.
*See also: Indicator Comparison Guide*

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