Supertrend Strategy v.1.0 (Nikko)

This is the well-known Supertrend indicator, adapted for use as a strategy and updated to be compatible with Pine Script v6.

While I am not the original author of this indicator, I was curious to assess its real-world performance. The Supertrend is widely promoted by trading influencers, and I assumed many traders rely on it in their decision-making.

My goal was to stress-test the Supertrend by converting it into a strategy, to evaluate whether it could be a reliable tool to follow.

After testing it across various timeframes and assets, I found that it generally delivers poor results in terms of profitable trades. It performs somewhat better when the number of trades is kept low, but once trade frequency increases, the strategy tends to lose significantly due to its low win rate. This is an important caveat for those considering its use—be cautious, especially in high-frequency setups.

The source code is open for anyone who wants to improve or investigate further. If you identify any optimizations or bugs, feel free to share them with the community so we can all benefit.
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How the Supertrend Indicator Works
The Supertrend indicator is a trend-following tool designed to identify whether the market is in a bullish or bearish phase. It's often used to signal potential entry and exit points for trades.

It is built on the Average True Range (ATR), a measure of volatility, and a user-defined multiplier. These inputs are used to calculate dynamic support and resistance bands:

When the price is above the Supertrend line, the trend is considered bullish.

When the price is below the Supertrend line, the trend is considered bearish.

These trend shifts can offer visual cues for trade direction, but as seen in strategy testing, the effectiveness may vary widely depending on market conditions and timeframes.