Supertrend v4.0 with EMA Filter – Tradingview Pinescript Code

Supertrend with a simple EMA Filter can improve the performance of the signals during a strong trending market and reduces the number of trades as well which in turn reduces the trading cost + unwanted losing trades. i.e overall drawdown reduces and improves the sharp ratio compared to the regular supertrend long/short signals.

Strategy Rules

Buy – if candle closes above supertrend and price above 200 EMA on closing basis
Exit Buy – if price of the candle closes below supertrend.

Strategy Parameters

EMA Filter used: 200 EMA

Strategy Type: Long Only

Recommended Timeframe: 15min

Symbol Backtested: Nifty Futures

Backtesting Period : Jan 2017 – 29th Nov 2022 – Till to date

Supertrend Default Parameters: Multiplier- 3 and ATR Length – 10

Optimization : No

Position Size : 1 lot (50 shares)

Supertrend V4.0 – Nifty Futures 15min Charts

During the sideways markets, it behaves like supertrend, creating noisy signals. However, the overall performance of the super trend improves with reduced drawdown

Equity Curve per lot

Absolute Drawdown per lot

Backtesting Metrics

Tradingview Pinescript Code – Supertrend V4.0

// This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © algostudio
// Coded by Rajandran R (Founder - Marketcalls and Creator - OpenAlgo)

//@version=5
strategy("Supertrend with EMA as Filter", overlay=true)


//input controls
factor = input.float(2,"Factor",1.0,10.0,0.5)
length = input.int(10,"ATR Length",1,100,1)

[supertrend,direction] = ta.supertrend(factor,length)

ema200 = ta.ema(close,200)

plot(ema200,"EMA 200",color.yellow,linewidth = 2)

//direction variables contains series of +1 and -1
//supertrend variable contains the supertrend line

longEntry = direction == -1 and close > ema200
longExit =  direction == 1 and direction[1] == -1

shortEntry = direction == 1 and close < ema200
shortExit = direction == -1 and direction[1] == 1

supcolor = direction == -1 ? color.green : color.red 

plot(supertrend,"Supertrend",supcolor,linewidth = 2)

if(longEntry)
    strategy.entry("BUY",strategy.long,comment="BUY")
if(longExit)
    strategy.close("BUY",comment="BUY EXIT")
// if(shortEntry)
//     strategy.entry("SHORT",strategy.short,comment="SHORT")
// if(shortExit)
//     strategy.close("SHORT",comment="SHORT EXIT")