Supertrend with scaled exits
This is a refined version of the popular Supertrend intraday system. A Supertrend flip on 5-minute NIFTY futures bars is traded only when it agrees with the 200-period EMA and ADX shows a trend. The position is split into three one-lot tranches, booked at 1.5, 3 and 5 ATR, with the stop moved to breakeven after the first target and then trailed. Everything is flat by 15:15.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
Every condition lost money in this test, so the evidence only shows where losses were heaviest. Days when NIFTY was below its 20-day average lost ₹2,05,871 over 39 trades, against ₹37,433 over 33 in an uptrend. After a VIX close above 14.5 the strategy lost ₹1,27,185 over 22 trades, while calm evenings below 11.5 cost only ₹11,894 over 24 with a 67% win rate. Choppy sessions lost ₹1,24,166 over 38. The mechanism is in the code: the first stop is the Supertrend line, which on 5-minute bars in a volatile market sits far away, so three lots lose a lot when a flip fails.
About this strategy
- Build 5-minute bars of the near-month NIFTY future with Supertrend (10, 3), a 200-period EMA, and a 14-period ADX and ATR; the indicators restart on each new contract.
- Go long when a bar closes above the Supertrend line, above the 200 EMA, with ADX above 20; go short in the mirror case. Signal bars must close between 09:30 and 14:45.
- Enter three lots, one per tranche, on the next tick.
- Book the first lot at 1.5 ATR, the second at 3 ATR and the third at 5 ATR from the entry.
- The initial stop is the Supertrend line; after the first target it moves to breakeven, then trails at the better of the Supertrend line or 2 ATR from the close.
- Close anything still open at 15:15; a new trade needs a fresh Supertrend flip.
Why traders use it
Plain Supertrend whipsaws in sideways markets, so traders add filters: the 200 EMA keeps trades on the side of the bigger trend, and ADX above 20 asks for evidence that a trend exists at all. Scaling out in three steps banks some profit early while leaving a runner for larger moves, and the move to breakeven is meant to turn many trades into free rides. It is a widely shared refinement of one of the most popular indicators among Indian intraday traders.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 the filters let through 73 trades, about 6 a month. Nearly half won, but the average loss (₹12,552) was twice the average win (₹6,170), and the third target at 5 ATR was reached only 4 times. Twenty-three tranches were stopped on the Supertrend line before any target. Net P&L was a ₹2,61,030 loss before costs and ₹3,10,896 after ₹20 per order and slippage, with a ₹2,96,647 drawdown. June alone lost ₹79,386. The filters did not stop the failed flips that sank the year.
What the settings do
Risks
- The initial stop is the Supertrend line, which can be far away on volatile days, and it applies to three lots at once.
- Scaling out cuts winners while full-size losses remain, which made losses twice the size of wins here.
- Restarting indicators at each contract means no trades for about three sessions after each futures expiry.
- Filters reduce the number of trades but did not improve their quality in this period.
Who it suits
Intraday futures traders who follow Supertrend and want a filtered, scaled version, with margin for three NIFTY lots and the tolerance for large single-trade losses.
Questions traders ask
What is the Supertrend 200 EMA ADX strategy?
It takes Supertrend flips only when price is on the same side of the 200-period EMA and ADX is above 20. The EMA keeps trades with the bigger trend and ADX checks that the market is trending rather than ranging.
What are scaled exits?
Instead of exiting the whole position at once, the trade is split into parts that close at different targets, here at 1.5, 3 and 5 times the ATR. Early targets bank profit, and later ones aim for bigger moves.
Is the refined Supertrend strategy profitable on NIFTY?
In this backtest from 1 Oct 2025 to 30 Sep 2026 it lost ₹2,61,030 before costs and ₹3,10,896 after ₹20 per order and bid-ask slippage, trading three lots per signal. Statutory charges are excluded. Past results do not guarantee future ones.
Why move the stop to breakeven after the first target?
Once one lot is booked at a profit, moving the stop on the rest to the entry price means the remaining lots can no longer turn the trade into a loss. In practice many trades were then stopped at breakeven on the next pullback.