EMA vs Supertrend
Michael Whitman
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Trading since 2017, full-time since 2020
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Published 2026-09-08
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Updated
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Reviewed
An exponential moving average is a weighted line through closing prices, and the reading is left to you. Supertrend places a trailing line a multiple of average true range from each bar's midpoint and flips side only when a close gets through it, so it names a direction and a stop instead of an average.
Both get called trend tools, and both sit on the price chart as a single line. One averages closes and takes no position. The other is a stop that moves only in the trade’s favor and switches sides when it is hit. Measured on ether, a market that rarely sits still, the gap between those two designs is large.
What each one is
In an exponential average each close enters with a weight of 2/(N+1), so recent closes count for more than old ones. Price is above it or below it, and the line itself never changes side. The formula and the seed are on the exponential moving average page.
Supertrend is built from average true range. Take each bar’s midpoint, add three times the 10-day ATR for the upper line and subtract it for the lower. The active line only ratchets toward price, never away, and when a close crosses it the indicator flips to the other line. Supertrend covers the settings.
So the average describes, while supertrend decides. The average says where price sits against its recent mean; supertrend says which side a fixed rule would hold and where it would stop out.
Where they differ
What makes them change side. A single close beyond the average counts as a cross. Supertrend needs a close beyond a line that sits three ranges from the midpoint, so far more movement is required before it turns.
How far the line is from price. Because the stop is measured in ranges rather than averaged from closes, it sits well away from price on a volatile market, whereas the average stays close to the action.
Whether the line can move against you. The average follows price both ways. The supertrend line cannot move back while the side holds, which is the property that makes it a stop rather than a guide.
What each needs from the bar. The average uses closes alone. Supertrend uses highs, lows and closes, both for its range and for its midpoint.
Which one to use: EMA or Supertrend?
Use the exponential average when you want a reference you interpret, such as only looking for longs while price is above it, and you accept that it will be crossed often.
Use supertrend when you want a written exit rule that does not change its mind on one bar, and when you can afford the distance to its line.
Use neither as a reason to enter on its own. A cross of the average and a supertrend flip are both descriptions of what already happened.
How often each changed its mind on ether
The test. ETH-USD daily bars from Yahoo Finance, 29 November 2017 to 2 October 2026, which is 3,230 days, counted from the first day both tools have a value. Supertrend uses a 10-day Wilder ATR and a multiplier of 3; the comparison line is a 20-day exponential average of closing prices, seeded with a 20-day simple average. A supertrend flip is any day it switches side, whereas a cross is any close that lands on the opposite side of the 20-day line compared with the day before.
Supertrend changed side 76 times, about 8.6 times a year. Closes crossed the average 356 times, 40.27 a year. In every full year from 2018 to 2025 the crosses outnumbered the flips more than twofold: flips ran from 5 (2020) to 13 (2024), crosses from 34 (2022) to 53 (2020).
Most crosses did not last. 217 of 355 crosses (61.13%) were followed by another within 5 days. Only 3 of the 75 gaps between supertrend flips were that short (4.00%). A side lasted a median 34 days on supertrend, the longest 150 (6 April to 2 September 2020), against a median 3 days and a longest of 63 for a close’s stay on one side of the average.
What the slower flip costs
The line is further away. On the median day the supertrend line sat 12.51% from ether’s close, against 5.23% for the 20-day average. A stop at the supertrend line therefore risks more than twice the distance, and a position sized for the same dollar risk has to be smaller.
And the flip comes later. For each flip, the latest cross of the average in the same direction came a median 2 days earlier.
A summer 2026 case. On 2 July 2026 ether closed at $1,698.17, above its 20-day average of $1,664.98, after closing below it on every day from 16 June. Supertrend stayed short until 6 July, when the close of $1,797.57 got through its line; the new long line was set at $1,545.08, about 14% below that close. The average had turned four days sooner, and the supertrend stop sat far further away.
The original data
The sample. ETH-USD daily bars (Yahoo Finance; the coin trades every day, so a day is a session), 29 Nov 2017 to 2 Oct 2026, 8.84 years. Supertrend was long on just under half of all days, and the two tools pointed the same way on 82.45% of days.
The headline figure. 61.13% of crosses of the average, and 3 of 75 supertrend flips, were reversed within 5 days.
The file. Each day’s ATR, supertrend line and side, the 20-day average, and every flip and cross are in the ETH supertrend and EMA file.
What is left out. Returns after a flip or a cross are not measured, and no trading rule is backtested. Other settings, such as a multiplier of 2 or a 50-day average, give other counts; these are one common pair only.
When it fails
The failure is choosing supertrend for its calm and then sizing as if its stop were close. A line that rarely flips on a volatile market does so because it sits far from price. Size a position for a tight stop, place the stop at the supertrend line, and the loss when it is hit is several times the plan. The calm and the distance are one property seen twice.
The second failure is treating each cross of the average as a turn. On ether most reversed again inside five days.
A third is lowering the multiplier after a large loss. The line moves closer and starts flipping like the average.
A fourth is comparing the two on one quiet year. Yearly counts moved a lot.
And a fifth is reading agreement as confirmation. Both lines are computed from one set of bars.
Related
The exponential moving average explains the line that never holds a side. Supertrend explains the flip rule and its two settings. And average true range is the measure that decides how far the supertrend line sits away.
Pick the tool by the job. If you want a line to glance at, the average is enough. If you want a rule that tells you where you are wrong, use supertrend, and size the position for how far away its line sits, because on a volatile coin that distance is large.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.