The Supertrend indicator strategy is the ATR trailing stop that half of YouTube swears by: go long when price flips above the line, get out when it flips below. We tested the classic Supertrend 10 3 setting, long and short, on daily Nasdaq-100 futures (NQ) from June 7, 2010 to April 16, 2026. One side of it works reasonably well. The other side would have bled you dry.
What the Supertrend indicator is
Supertrend is commonly credited to French trader and author Olivier Seban, and spread widely through charting platforms. It is essentially a volatility-adjusted trailing stop:
- Take the midpoint of each bar, (high + low) / 2.
- Add and subtract a multiple (here 3) of the Average True Range (here 10 bars) to get upper and lower bands.
- The lower band can only ratchet up while the trend is up; the upper band can only ratchet down while the trend is down.
- When the close crosses the active band, the trend "flips" and the line jumps to the other side of price.
The 10-period ATR with a 3x multiplier is the setting you'll see most often. Our ATR uses Wilder-style smoothing.
Supertrend 10 3 rules we tested
- Long entry: daily close flips Supertrend from down to up. Buy at that close.
- Long exit: Supertrend flips from up to down. Sell at that close.
- Short entry / exit: the mirror image (short on the down-flip, cover on the up-flip).
- Stop: the Supertrend line itself acts as the ATR trailing stop, but exits are taken only on a daily close through it, not intraday touches.
- No profit target, no trend filter. Costs: 1.0 NQ point per round trip.
All results are in NQ index points per 1 contract. A Micro E-mini Nasdaq-100 (MNQ) contract is worth $2 per point and a full NQ contract $20 per point, so MNQ dollars below are simply points × 2. Every trade has 1.0 point deducted per round trip to cover slippage and commission.
Supertrend indicator strategy results
| Metric | Supertrend 10 3 long | Supertrend 10 3 short |
|---|---|---|
| Trades | 76 | 77 |
| Win rate | 48.7% | 22.1% |
| Avg trade (pts) | +148.37 | -155.99 |
| Total (pts) | +11,275.8 | -12,011.5 |
| Profit factor | 1.78 | 0.39 |
| Closed-trade drawdown (pts) | 3,304.5 | 12,026.8 |
| Avg win / avg loss (pts) | 694.18 / -369.46 | 452.0 / -328.26 |
| MNQ total ($, 1 contract) | $22,552 | -$24,023 |
| Points 2010–2019 | +3,463.0 | -4,082.0 |
| Points 2020–2026 | +7,812.8 | -7,929.5 |
| Profit factor 2020–2026 | 1.68 | 0.44 |
Buy and hold NQ over the same window: 24,677.2 points.
The long side: a respectable trend follower
Long-only Supertrend 10 3 made 11,275.8 points on 76 trades, a 1.78 profit factor and a 48.7% win rate. On one MNQ contract that is $22,552. The shape is textbook trend following: the average winner (694.18 points) was nearly twice the average loser (-369.46), so you can be wrong more than half the time and still come out ahead.
It still trailed buy and hold, capturing about 45.7% of the points, because every down-flip sidelines you, and in a market that mostly rose, many of those flips were false alarms. Bad years were real: -2,319.0 points in 2022, -724.2 in 2018 and -1,071.5 so far in 2026 (through April 16).
A note on drawdown: the figure we report is closed-trade drawdown, the worst peak-to-trough of the equity curve built only from finished trades. It ignores how far an open position sank before it was closed, so for a system that holds for weeks it understates the pain you would actually sit through.
The short side: an ATR trailing stop can't save a bad direction
Shorting every down-flip lost 12,011.5 points over 77 trades. Only 22.1% of shorts won, and the profit factor was 0.39. Every single year from 2010 through 2021 was negative. The only meaningful winning year was the 2022 bear market (+1,572.5 points), and even that was more than wiped out in 2023 (-2,048.0). On MNQ, that's -$24,023. We look at this pattern across seven different short systems in why trend-following shorts failed on NQ.
Robustness check: 2010–2019 vs 2020–2026
Because NQ's price grew many times over, point totals lean on the recent era. The long side made 3,463.0 points in 2010–2019 and 7,812.8 in 2020–2026, with a 1.68 profit factor in the second half. It was positive in both halves, which is the minimum bar we look for. The short side lost 4,082.0 points in the first half and 7,929.5 in the second, with a 0.44 recent-era profit factor. Consistently bad.
Our take: Supertrend 10 3 is a decent long-only trend filter on daily Nasdaq futures, and a genuinely bad reason to short. The ATR trailing stop idea is sound; what killed the short side was direction, not the stop. If you use Supertrend, use it to decide when to stand aside from longs, not when to sell short. And be honest with yourself about the drawdowns: exits only on a close through a 3-ATR line can mean giving back a lot of open profit before you're out.
If you want a trend filter with even fewer trades, compare our golden cross test; for a breakout alternative, see the Turtle/Donchian backtest.
What this Supertrend backtest does not model
- Roll gaps. The test runs on a continuous front-month NQ series, so quarterly contract rolls can create small artificial price jumps.
- Perfect fills. Signals are computed on the daily close and filled at that same close. In real life you need to act in the last minutes of the session or accept the next open.
- Overnight and weekend risk is in the price series, but position sizing, margin calls and psychological stamina through deep open drawdowns are not.
- No taxes or financing costs are modeled beyond the 1-point round-trip deduction.
This is a backtest on one instrument. Past results do not guarantee future results, and nothing here is financial advice.
Key takeaways
- Supertrend 10 3 long-only made 11,275.8 NQ points (PF 1.78) on 76 trades, 2010–2026.
- It was profitable in both 2010–2019 and 2020–2026.
- The short side lost 12,011.5 points; only 2022 was a strong year.
- It still captured less than half of buy and hold's 24,677.2 points.
- Use Supertrend as a long-side filter, not a short signal, on NQ.
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FAQ
Does the Supertrend indicator strategy work on Nasdaq futures?
Long-only, yes in this test: Supertrend 10 3 made 11,275.8 NQ points with a 1.78 profit factor on daily bars from 2010 to 2026. Shorting the same signals lost 12,011.5 points.
What are the best Supertrend settings?
We only tested the common 10-period ATR with a 3x multiplier on daily bars, so we can't say which setting is best. Tuning to the backtest invites curve fitting.
Who created the Supertrend indicator?
It is commonly credited to French trader and author Olivier Seban.
Is Supertrend the same as an ATR trailing stop?
Essentially, yes. It trails a line a multiple of ATR away from the bar midpoint and flips sides when price closes through it.
Loomi.Ai provides educational market research, not financial advice. Trading futures and options involves substantial risk of loss, and backtested results are historical and do not guarantee future returns.
Sources
- Loomi backtest: blog_strategy_tests.py + results JSON, Loomi research
- Supertrend, TradingView