I tested the super trend indicator 200 times and saw something really interesting.
This is what the super trend indicator looks like.
Based on the name, you might think that it must be a really good trend indicator.
Well, yes, it shows the trend super nicely.
In fact, this is one of the best indicators I have seen when it comes to identifying the trend direction.
When the super trend indicator is showing a green line below the price, something like this, then there is an uptrend going on.
If it is showing a red line above the price, something like this, then there is a downtrend going on.
But things get even better.
Let’s say you have taken a long trade in an uptrend.
You can use this supertrend indicator to trail your stop loss.
As the price moves up, you can trail the stop loss below this supertrend line and exit when the price finally crosses below it.
It is one of my favorite indicators and definitely one of the good-looking indicators I have ever seen.
But does it even make money?
What’s its win rate?
You see, many people like to buy when the supertrend starts showing an uptrend.
They set the stop loss below the supertrend line.
But we can’t buy and sell at every trend reversal.
I mean, look at this smaller downtrend the supertrend showed.
If you had taken a short trade when the supertrend showed a downtrend, you wouldn’t have made a good amount of money.
This downward move was actually a pullback in the longer-term uptrend.
So, to avoid taking short trades in the longer-term uptrend, we can use the 200-period moving average.
If the price is above it, we will only buy and not sell.
For my testing, I set the profit target at 1.5 times the stop-loss distance.
If the price is below the 200-period moving average, then we will only look to sell when the supertrend starts showing a downtrend.
We will set the stop loss above the supertrend line and the profit target at 1.5 times the stop-loss distance.

We are using a 1.5-to-1 reward-to-risk ratio profit target because that’s the one I have used in most of my testing videos.
It was also the best ratio for trend strategies according to the testing data we have seen on the Trading Rush channel.
The thing is, I have tested this strategy before.
It had a 46% win rate, which was above the 40% breakeven win rate of the 1.5-to-1 reward-to-risk ratio.
In other words, it managed to make a decent amount of profit.
But that was in the mostly good market, where the trend was mostly trending.
But what will happen if I give the supertrend indicator a “super good” market?
I mean, we have seen some strategies give a really high win rate.
Can supertrend break their records and get an even higher win rate?
On top of that, how low can the win rate go if I take 100 trades in the “extremely bad” market as well?
Will you blow up your account with this strategy when the market conditions get bad?
Well, to find out, I went to the Gold/USD daily time frame and added a 9-period EMA to the chart.
Gold/USD has given some really nice uptrends, even in the long term.
So, in the “extremely good market” test, I only took long trades when the price was clearly above the 9 EMA.
If the price was not clearly staying above the 9 EMA, or was ranging, choppy, or just straight-up bad for trend-trading strategies, I drew red boxes.
In the bad market test, I only took trades in these bad red boxes.
I only did this good-market and bad-market filtering on the one-day time frame.
The entry time frame where I took trades with the super trend indicator was 30 minutes.
So, when I took a hundred trades in the “extremely good” market, this is what happened.
When I test indicators like this, I find multiple things to say, like where the indicator sucks or where it performs the best.
I mean, there are strategies that give breakout trades or something else that is not directly the trend itself.

But since this super trend indicator just tries to show the trend or where the trend has reversed from, the conclusion was really simple.
The performance of this indicator directly depends on how well the price is trending.
In other words, if the price is trending pretty strongly without any choppy movement, this indicator will show the trend pretty nicely.
You can see on the profit graph that the profit line is moving in an upward direction from the start and pretty consistently.
It won seven trades in a row and lost six trades in a row.
At the end, the super trend indicator got a 57% win rate in the “extremely good” market.
This is definitely an improvement from the 46% win rate it got in the “mostly good” market.
If you are thinking that all strategies will improve their win rate by a large amount in the “extremely good” market, well, no.
We have seen strategies that didn’t improve their win rate that much even in the extremely good market.

But what about the “extremely bad” market?
Well, when I took a hundred trades in it, the profit graph started to move down.
But it was not moving down fast, like some other strategies we have tested in the same bad market structure.
As we know, this indicator’s win rate is directly dependent on how well the market is trending.
Since the slow, choppy, and ranging market didn’t have nice long-term trends, this supertrend’s performance was not that good.
It won around five trades in a row and lost around eight trades in a row.
At the end, it got a 36% win rate, which is lower than the 40% breakeven win rate, of the 1.5-to-1 reward-risk ratio.
Since the profit graph is moving in a downward direction like a downtrend, you will have a high probability of blowing up your account with this indicator when the market conditions get bad.
So, now it’s time to give it a TR score, or the Trading Rush score, so we can compare it with other strategies we have tested in this series.

In the mostly good market test we did previously, supertrend had a 5.5 out of 10 score in the win rate category.
And overall, it had a medium score.
The biggest thing it had going for it was how easy to use it was.
In the “extremely good” market test we did in this video, supertrend still gets a 7.8 out of 10 score in the ease-of-use category, which is pretty nice.
But its win rate category score is now much higher at 7.6.
Still, it’s not the highest score we have seen in this extremely good testing series.
It is a really reliable indicator, especially when the trend is good, so it gets an 8 out of 10 in the reliability category.
Since the profit graph moved in an upward direction pretty consistently, it gets a 7 out of 10 in the “consistency of profit” category.
As for quality of trades, it gets a 9 out of 10.
This is because the way it gives trades is similar to the MA-CD and other similar high-quality setup strategies.
It doesn’t spam trades compared to some other horrible strategies we have seen so far.
Overall, it gives entry points where the price has actually changed direction.
That brings the total TR score to 39.4.
This is actually the highest TR score we have seen so far in this “extremely good” testing series.
The interesting thing is that the supertrend’s win rate was not the highest we have seen.
It got a high total score because of how easy it is to use and because it actually gives good-quality entries without spamming too much.
But in the “extremely bad” market, the supertrend indicator gets a 3.5 out of 10 score in the win rate category.

It gets the same 7.8 out of 10 score in the easy-to-use category.
But in the reliability and quality of trades categories, it gets a 3.5 out of 10.
Since it didn’t make money in the bad market, it gets a 0 out of 10 score in the “consistency of profits” category.
That brings the total TR score to 18.3.
It is not the highest score we have seen so far in the bad market, but it’s not the lowest either.

You can say the supertrend indicator gets a medium win rate in the “mostly good” market.
It makes money there, but slowly.
I mean, we have seen other trading strategies in the “mostly good” market that gave a way higher win rate and made a profit much faster than this one, even in the same market conditions.
In the “extremely good” market, supertrend doesn’t get the highest win rate, but it gets a high enough win rate and performs really well compared to other strategies.
But in the bad market, even though its win rate is medium compared to other strategies, it’s still below the breakeven win rate.
So, you really have to be good at identifying the good and bad markets when trading with this indicator.
In other words, you have to be really good at spotting the end of the trends and start of the range market.
So you don’t end up blowing up your account when the price starts ranging.
Since this is an ongoing testing series, let’s see if we find a strategy that performs really well in both extremely good and extremely bad markets.
Thanks for watching.