Supertrend Long Entries with Percentage Risk and Reward Levels

Summary

This strategy uses Supertrend bands, calculated from average true range and a factor, to identify long entries and exits. The stated entry is a close crossing above the upper band, while a close crossing below the lower band closes the long. It also describes setting a stop and target from the entry price using configurable risk and reward percentages, with a one-to-five example ratio. The published settings cover BTC/USDT futures on hourly bars with a 15-minute base period for May 2024. No trade outcomes or performance statistics are given.

The document frames the method as trend-following and notes potential sensitivity to Supertrend parameters, abrupt reversals, and low-volatility ranges that can generate repeated trades and costs. It suggests market-regime filters, other indicators, and position-sizing changes, but presents no evidence that these improve results. There is also a mismatch in the supplied source: it passes the calculated stop and target prices to the entry order rather than placing separate exit orders, and it separately closes on a lower-band cross. Thus, the implementation may not match the described risk-control behavior. The strategy is long-only as shown, and the stated reward-to-risk setup is not validated by reported backtest results.

Key ideas

• Supertrend bands use ATR and a factor to define dynamic levels for long entries and exits.
• The described long entry follows a close crossing above the upper band, with a lower-band cross closing the position.
• The document proposes percentage-based stop and target levels with an example one-to-five reward-to-risk ratio.
• The source passes stop and target prices to an entry order, so its implementation may differ from the described exit handling.
• The backtest settings cover a short BTC/USDT futures period, but no performance results are reported.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.