The Supertrend indicator plots a line offset from price by a multiple of ATR, above price during a downtrend, below it during an uptrend, and flips sides when price crosses it. The flip itself is the trading signal: a flip from above to below price reads as a new uptrend starting, and vice versa.
Because it's ATR-based, the band width adapts to volatility the same way an ATR stop does, wider in a volatile market, tighter in a calm one, which is part of why it's popular for both signal generation and as a trailing-stop mechanism in one indicator.
It's a well-known, transparent trend tool with no hidden parameters, easy to audit, which is exactly why it's kept in zengtrade's research library even though, on the specific cost model and universe tested so far, it hasn't cleared the bar to be recommended to users yet.
Educational content, not investment advice. zengtrade is paper-first and non-custodial.