Tested by BacktestingMax

Supertrend (10, 3) strategy backtest

Does the Supertrend strategy make money?

Mostly no: only 10 of our 36 backtests made money and had enough trades to judge (at least 100), all on 1-hour and 4-hour charts, and only 4 tests made money in both the older years (2014–2021) and the newer years (2022–2025). Supertrend is an indicator that shows the trend as one line on the chart, about 3 times the ATR away from the price (ATR is how far price moves in an average candle). When a candle closes on the other side of the line, the line flips to the other side of the price. We tested the standard rules: buy when Supertrend flips to an uptrend, and sell short (sell first and buy back later, to make money if price falls) when it flips to a downtrend, with the default settings, 10 and 3. We tested 9 markets (5 currency pairs, gold and 3 stock indices), each on 15-minute, 1-hour, 4-hour and daily charts, from 2014 to 2025, after trading costs. On 15-minute charts, all 9 tests lost money, and on daily charts, 8 of the 9 had too few trades to judge. The 4 tests that made money in both periods were gold on 1-hour and 4-hour charts, GBP/JPY on 1-hour charts and the Nasdaq 100 on 4-hour charts. A higher-timeframe filter helped most: trade only when the Supertrend on a bigger chart points the same way. With it, 6 tests made money in both periods, compared with 4.

36 backtests 2014–2025 Trading costs included Tested 12 October 2026

Made money

10

of 36 tests, using the standard rules

Made money in both periods

4

2014–2021 and again 2022–2025

Best backtest

+104%

USD/JPY, 1-hour chart: account growth 2014–2025

With a higher-timeframe Supertrend filter

6

tests made money in both periods, compared with 4 using the standard rules

Made money in both periods

• GBP/JPY, 1-hour
• Gold, 1-hour
• Gold, 4-hour
• Nasdaq 100, 4-hour

Lost money on every market

• 15-minute charts

The results

Results on every market

Each box shows one backtest of the Supertrend strategy using the standard rules, from 2014 to 2025, after trading costs: the % result, and a small chart of the account balance. The solid line is the account balance and the dashed line is the starting balance. Green results made money; red results lost money. Under each result: whether it made money in both 2014–2021 and 2022–2025, or passed all four of our checks (see "How a test passes" further down).

The account balance

The best test and the middle test

What we found

What the 36 backtests show

1. On 1-hour and 4-hour charts, the Supertrend strategy made money in 10 of 18 tests: on USD/JPY, GBP/JPY, gold and the DAX on both charts, on EUR/USD on 1-hour charts, and on the Nasdaq 100 on 4-hour charts. GBP/USD, AUD/USD and the S&P 500 lost money on both charts. 4 of the 10 tests made money in both 2014–2021 and 2022–2025: gold on both charts, GBP/JPY on 1-hour charts and the Nasdaq 100 on 4-hour charts. The Nasdaq 100 test made very little: +0.6% from 2014 to 2025. Gold on 4-hour charts also passed all four of our checks (see 'How a test passes' further down). The best backtest was USD/JPY on 1-hour charts: +103.8% from 2014 to 2025. But it lost 1.2% in 2014–2021 and made all of its gain in 2022–2025.

2. On 15-minute charts, the strategy lost money on all 9 markets, and 7 of the 9 accounts lost more than 90% of their starting balance at some point. On these charts, the strategy made 500 to 620 trades a year on each currency pair and on gold. On average, trading costs took about 5% of the money each 15-minute trade risked, compared with about 2% on 1-hour charts and under 1% on 4-hour charts. On 6 of the 9 markets, the 15-minute trades lost money even before trading costs. Daily charts had the opposite problem: the strategy made only 5 to 9 trades a year, so 8 of the 9 markets had fewer than 100 trades in 12 years. With so few trades, a good or bad result could be luck, so we don't judge them.

3. Trades that closed quickly lost money, and trades that stayed open longer made it. In a sideways market (price moves up and down with no clear trend), Supertrend flips back and forth, and every flip opens a new trade. Traders call these quick flips whipsaws. R is the money risked on one trade: 1% of the account. On 1-hour, 4-hour and daily charts, 37% of the trades closed within 20 candles, and only 3.6% of those made money. The 33% of trades that stayed open more than 40 candles made money 77.7% of the time, and made 7,383.6R in total. The other 67% of the trades, which closed within 40 candles, lost 7,188.1R. Quick trades lost and longer trades made money on each of the three charts, and in both 2014–2021 and 2022–2025. The chart below shows the three charts together.

4. Only about 1 trade in 3 made money: on 1-hour and 4-hour charts, the win rate (the share of trades that made money) was 33.7% to 39.9%. So there were long losing streaks (many losing trades in a row). On 1-hour charts, the longest losing streak on each market was 14 to 18 trades, and each of these streaks lost 7.4R to 11.4R. On 4-hour charts, the longest losing streaks were 8 to 14 trades. Most losing trades lost less than 1R, because 80% of the trades on 1-hour, 4-hour and daily charts closed at a flip, before price reached the stop-loss.

5. The Supertrend line trails about 3 ATR behind the price, so a trade closes only after price has moved back from its best price. On 1-hour, 4-hour and daily charts, the winning trades were up 2.36R on average at their best price, and closed at +1.12R on average. A 2R take-profit (close the trade when it has made 2 times the money it risked) changed little. The trades that reached 2R made 1.89R on average with the trailing line, and only 2.4% of them ended with a loss (see the comparison below). With the 2R take-profit, 5 tests made money in both periods, compared with 4 with the standard rules.

Sideways markets

Trades that closed within 20 candles almost always lost

We grouped all 22,898 trades of the 27 tests on 1-hour, 4-hour and daily charts (standard rules, 2014 to 2025) by how many candles each trade stayed open. Each bar shows the average result of one trade, after trading costs, in R. R is the money risked on one trade: 1% of the account. For example, −0.78R means that these trades lost, on average, 78% of the money they risked.

• 1 to 10 candles3,853 trades, 1% made money −0.78R
• 11 to 20 candles4,638 trades, 6% made money −0.58R
• 21 to 40 candles6,839 trades, 28% made money −0.22R
• 41 to 80 candles5,656 trades, 71% made money +0.58R
• More than 80 candles1,912 trades, 97% made money +2.16R

The trades that closed within 20 candles lost 5,667.9R in total, and the trades that stayed open more than 40 candles made 7,383.6R. You can't know in advance how long a trade will last: it stays open until Supertrend flips again or price reaches the stop-loss. The 15-minute charts are left out, because 7 of those 9 accounts lost more than 90% of their starting balance, and after that their trades were much smaller. The pattern was the same there: 2.8% of the 15-minute trades that closed within 20 candles made money, and 70.3% of those that stayed open more than 40 candles.

After a 2R move

Trades that reached 2R almost never ended with a loss

These numbers cover all 22,898 trades of the standard rules on 1-hour, 4-hour and daily charts, from 2014 to 2025. R is the money risked on one trade: 1% of the account.

Winning trades at their best price

+2.36R

on average: the most they were up while they were open

Winning trades when they closed

+1.12R

on average, after trading costs

Trades that were up 2R or more at some point

16.9%

3,864 of the 22,898 trades. Only 2.4% of them ended with a loss.

Average result of those 3,864 trades

+1.89R

with the trailing line. 7.4% of them made more than 4R.

The stop-loss is about 3 ATR from the entry, so 1R is about 3 ATR, and 2R is about 6 ATR. The line trails about 3 ATR behind the price, so after a 2R move it is usually beyond the entry price, and the trade can no longer lose much. A 2R take-profit closes these trades at 2R, but it also closes the few trades that went much further. So the take-profit changed little: with it, 36.1% of the trades on these charts made money, compared with 35.5% with the standard rules.

The higher timeframe

Trades against the higher timeframe did worse on average, but they included most of the biggest winners

With the standard rules, we checked the Supertrend (10, 3) on the next higher timeframe when each trade opened: the 4-hour chart for 1-hour trades, and the daily chart for 4-hour trades. These numbers cover 22,141 trades from the 18 tests on 1-hour and 4-hour charts, 2014 to 2025. R is the money risked on one trade: 1% of the account.

Average trade in the same direction as the higher timeframe

+0.025R

8,634 trades (39% of all trades). 36.4% made money.

Average trade against the higher timeframe

+0.002R

13,507 trades (61% of all trades). 35.2% made money.

Biggest winners (more than 2R) that started against the higher timeframe

59%

748 of the 1,272 trades that made more than 2R

In all 748 of these big winners, the higher timeframe's Supertrend later turned in the trade's direction, while the trade was open. The new trend showed on the 1-hour or 4-hour chart first. The higher-timeframe filter skips trades like these. So it raises the average result per trade, but it misses many of the biggest winners (see 'Can the Supertrend strategy be improved?' below).

The strategy

What the Supertrend strategy is

Supertrend is an indicator that shows the direction of the trend as one line on the price chart. It is built from ATR (average true range), an indicator of how far price moves in an average candle. In an uptrend, the line is drawn 3 times the ATR below the middle of the candle (halfway between its high and its low), and it never moves down: when price rises, the line rises with it, and when price falls back, the line stays where it is, so price gets closer to it. When a candle closes below the line, Supertrend flips to a downtrend: the line jumps to 3 times the ATR above the middle of the candle, and from then on it never moves up. When a candle closes above the line again, Supertrend flips back to an uptrend. Most charts draw the line green in an uptrend and red in a downtrend. The default settings on TradingView and most other platforms are 10 (the number of candles in the ATR) and 3 (how many ATRs away the line is drawn). The Supertrend strategy trades every flip: it buys when Supertrend flips to an uptrend, and sells short when it flips to a downtrend. Many traders also use the line as a trailing stop-loss: a stop-loss that follows the price.

Supertrend

10, 3: the ATR of the last 10 candles (Wilder's average), and the line 3 ATRs from the middle of the candle. These are the default settings.

Stop-loss

The new Supertrend line on the candle that flipped, about 3 ATR from the price. It does not move.

Exit

The next flip: a candle that closes on the other side of the line. The trade closes at the next candle's open.

Take-profit

None

Risk per trade

1% of the account

Overnight fees

Not included. Brokers charge a fee (a swap), or sometimes pay one, for each night a trade stays open. Half of the trades stayed open longer than 1.3 days on 1-hour charts, 6 days on 4-hour charts and 36 days on daily charts.

The rules we tested

1. Use Supertrend (10, 3): the ATR of the last 10 candles (Wilder's average, as on TradingView), and a line about 3 times that ATR away from the middle of the candle. We check Supertrend when each candle closes. A trade opens at the open of the next candle, or of the candle after it (see rule 5).
2. Buy when Supertrend flips to an uptrend: a candle closes above the line, and the line jumps below the price. Sell short when Supertrend flips to a downtrend: a candle closes below the line, and the line jumps above the price.
3. A trade can close in two ways. First, the stop-loss: the new Supertrend line on the candle that flipped (the line after it jumps to the other side of the price). It is about 3 ATR below the price when you buy, or about 3 ATR above it when you sell short. The stop-loss does not move. If price reaches it, the trade closes at the stop-loss, or at a worse price if price gaps past it (opens beyond it). Then wait for the next flip.
4. Second, the next flip. While the trend lasts, the Supertrend line follows the price. When a candle closes on the other side of the line, close the trade at the next candle's open. So the line works as a trailing exit, but only a candle that closes beyond it closes the trade.
5. Then open a trade in the new direction. In our test, it opens one candle after the old trade closes. For example: a candle closes beyond the line (candle 1). The old trade closes at the open of candle 2, and the new trade opens at the open of candle 3, because the test opens a new trade only after the old one has closed. If no trade is open when Supertrend flips (for example, because the stop-loss closed it during candle 1 or earlier), the new trade opens at the open of candle 2.
6. There is no take-profit. Only one trade is open at a time.
7. Choose the trade size on the candle that flipped: from that candle's close to the stop-loss, so that a loss at the stop-loss costs 1% of the account. The trade opens later, at a slightly different price, so a loss at the stop-loss can be a little more or less than 1%: between about 0.7% and 1.3% in 8 trades out of 10.

The method

How we tested it

The test

Markets

EUR/USD, GBP/USD, USD/JPY, AUD/USD, GBP/JPY, Gold, S&P 500, Nasdaq 100 and DAX

Charts

15-minute, 1-hour, 4-hour and daily candles

Dates

January 2014 to December 2025

Account

$10,000, risking 1% of the account on each trade

Trading costs

Included. Every trade pays that market's normal trading cost: the spread, which is the gap between the buy price and the sell price.

How a test passes

We call a test passed only if it meets all four checks. A strategy can make money in one backtest and still fail one of these checks.

• At least 100 trades. With fewer trades, a good result could be luck.
• It made money from 2014 to 2021 and again from 2022 to 2025. This shows whether the strategy kept working in the newer years, not only in the older ones.
• A profit factor (the money won divided by the money lost) of at least 1.2 from 2022 to 2025, after trading costs.
• In 95% of 1,000 random shuffles of the trades, the account must not fall more than 30% from its highest point.

Improvements

Can the Supertrend strategy be improved?

We tried two changes traders often make to the Supertrend strategy, one at a time, on the same 36 tests. The first is a filter: trade only in the direction of the Supertrend on a higher timeframe, the way many traders check the 4-hour chart before they take a trade on the 1-hour chart. The second changes the exit: take profit at 2 times the money risked (2R). If Supertrend flips first, the flip still closes the trade. If you pick the best change and judge it on the same years, it will almost always look good. So we picked the best change using 2014–2021 only, by the number of tests that made money, and then checked it on 2022–2025.

Yes, a little. In 2014–2021, the years we used to pick the best change, the higher-timeframe filter did best: 18 of 36 tests made money with it, compared with 10 with the standard rules. In 2022–2025, the years we kept for the check, it also did better: 20 of 36 tests made money, compared with 15, and the middle test (half of the 36 did better, half did worse) was +1.6%, compared with −0.7%. 6 tests made money in both periods with it, compared with 4. On 1-hour and 4-hour charts, the filter skipped about 6 trades in 10, and the average trade did better: on 1-hour charts it made +0.026R with the filter, compared with +0.009R, and on 4-hour charts +0.027R, compared with +0.015R. R is the money risked on one trade. But the filter also skipped many of the biggest winners (see 'The higher timeframe' above), so some big gains shrank or became losses: the DAX on 4-hour charts went from +37.4% to −5.0%, and GBP/JPY on 4-hour charts from +41.5% to +9.3%. On daily charts, it left only 26 to 45 trades per market, too few to judge. The 2R take-profit made money in 13 of 36 tests in 2014–2021 and in 17 in 2022–2025, a little more than the standard rules.

Passed all four checks with a higher-timeframe Supertrend filter

• Gold, 4-hour
• Nasdaq 100, 4-hour

Questions

Questions traders ask

Keep exploring

Related strategies we tested

class Supertrend103(Strategy):
    """Supertrend (10, 3) stop-and-reverse, as most traders use it, plus common changes.
    Standard (all switches off): Supertrend with a 10-candle ATR and a multiplier of 3.
    Buy when it flips up (a candle closes above the line), sell short when it flips down.
    The stop-loss is the Supertrend line on the candle that flipped, and the trade is sized
    on that candle so that a loss at the stop costs 1% of the account. The stop-loss does
    not move, but the line does: a close on the other side of the line (the next flip)
    closes the trade at the next candle's open, and the new trade opens one candle later
    (it can only be placed once the old trade has closed), still sized and stopped as at
    the flip. After a stop-loss (or a take-profit), wait for the next flip.
    The changes, one at a time:
      htf_filter = 1   only open a trade when the Supertrend (10, 3) on the next higher chart
                       (M15 -> H1, H1 -> H4, H4 -> daily, daily -> weekly) points the same way
      exit_rr    = 2   add a take-profit at 2 times the risk; a flip still closes the trade
    """
    params = {"period": Param(type=int, default=10, min=1, max=100),
              "multiplier": Param(type=float, default=3.0, min=0.5, max=10.0),
              "htf_filter": Param(type=int, default=0, min=0, max=1),
              "exit_rr": Param(type=float, default=0.0, min=0.0, max=10.0)}
    lookback = 50
    def init(self, ctx):
        self.st = ctx.indicator("builtin:supertrend", period=ctx.params.period,
                                multiplier=ctx.params.multiplier)
        self.htf = None
        if ctx.params.htf_filter == 1:
            higher = {"M5": "M30", "M15": "H1", "M30": "H4", "H1": "H4",
                      "H4": "D1", "D1": "W1"}[ctx.timeframe]
            self.htf = ctx.tf(higher).indicator("builtin:supertrend", period=ctx.params.period,
                                                multiplier=ctx.params.multiplier)
        self.reverse_to = None  # "long" / "short": open this once the closing trade is gone
    def on_bar(self, ctx):
        d0, d1 = self.st.direction[0], self.st.direction[1]
        if d0 is None or d1 is None or self.st.line[0] is None:
            return
        flip_up = d1 == -1 and d0 == 1
        flip_down = d1 == 1 and d0 == -1
        pos = ctx.position
        if pos is not None:
            # The line is the trailing stop: a close beyond it (a flip) ends the trade.
            if pos.is_long and d0 == -1:
                ctx.close_position()
                self.reverse_to = "short"
            elif pos.is_short and d0 == 1:
                ctx.close_position()
                self.reverse_to = "long"
            return
        # A reversal waits one candle for the close to fill. Drop it if the trend flipped back.
        pending, self.reverse_to = self.reverse_to, None
        go_long = flip_up or (pending == "long" and d0 == 1)
        go_short = flip_down or (pending == "short" and d0 == -1)
        # The flip candle: this candle, or the one before it for a reversal that waited.
        k = 0 if (flip_up or flip_down) else 1
        flip_close, stop = ctx.close[k], self.st.line[k]
        if stop is None:
            return
        long_ok = short_ok = True
        if self.htf is not None:
            h0 = self.htf.direction[0]
            long_ok, short_ok = h0 == 1, h0 == -1
        rr = ctx.params.exit_rr
        if ctx.gate("supertrend_flips_up", go_long) and ctx.gate("higher_chart_up", long_ok):
            if stop < flip_close and stop < ctx.close[0]:
                tp = ctx.close[0] + rr * (flip_close - stop) if rr > 0 else None
                ctx.buy(size=ctx.size_by_risk_pct(0.01, stop=stop, entry=flip_close), sl=stop, tp=tp,
                        tag="supertrend_long")
        elif ctx.gate("supertrend_flips_down", go_short) and ctx.gate("higher_chart_down", short_ok):
            if stop > flip_close and stop > ctx.close[0]:
                tp = ctx.close[0] - rr * (stop - flip_close) if rr > 0 else None
                ctx.sell(size=ctx.size_by_risk_pct(0.01, stop=stop, entry=flip_close), sl=stop, tp=tp,
                         tag="supertrend_short")

Your turn

Test the Supertrend strategy yourself

Change the settings, the market or the stop-loss and see the result in seconds. Ask the BacktestingMax AI: Backtest a Supertrend (10, 3) strategy on gold, 4-hour chart, that buys when Supertrend flips up and sells short when it flips down, taking only the trades in the direction of the daily Supertrend.

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Backtest on historical data with trading costs, run by BacktestingMax. Past results do not guarantee future results, and nothing here is financial advice. Updated 12 October 2026.