25-75 Percentile SuperTrend | Mattes

25-75 Percentile SuperTrend | Mattes

Overview
The 25-75 Percentile SuperTrend is an advanced trend-following indicator that enhances the traditional SuperTrend concept by incorporating percentile-based smoothing. Instead of using a simple moving average or median price, this indicator calculates the 25th and 75th percentiles over a user-defined period. These percentiles act as dynamic trend levels, adjusting more responsively to price volatility while reducing noise.

How It’s Calculated
Percentile Smoothing:

• The 25th percentile of the selected source (low-end smoothing).
  
• The 75th percentile of the selected source (high-end smoothing).
  

SuperTrend Logic:

• The upper band is set at the 75th percentile + ATR multiplier.
  
• The lower band is set at the 25th percentile - ATR multiplier.
  
• The trend flips when the price crosses above/below these dynamic bands.
  

Signal Generation:

• A bullish trend occurs when price remains above the lower band.
  
• A bearish trend occurs when price remains below the upper band.
  
• Trend shifts are highlighted with colored bars and lines for easy visualization.
  
• How It Differs From Traditional SuperTrend
  

Uses Percentiles Instead of a Moving Average:
Traditional SuperTrend relies on ATR-based offsets from a moving average.
This version replaces the moving average with percentile smoothing, which adapts better to price behavior.

Better Noise Filtering:
Since percentiles are less sensitive to outliers, this indicator reduces false signals in choppy markets.

More Adaptive to Market Conditions:

• The percentile smoothing dynamically adjusts trend detection based on price distribution rather than fixed calculations.
  
• Why It’s Useful
  
• ✅ Reduces Whipsaws: Helps minimize false breakouts by using percentile-based bands instead of traditional ATR-only bands.
  
• ✅ Works in Different Market Conditions: Effective in both trending and ranging environments due to its adaptive nature.
  
• ✅ Enhances Trend Confidence: Provides clearer signals by filtering noise more effectively than standard SuperTrend indicators.
  

Application Examples

• Trend Following: Use it to identify strong upward or downward trends.
  
• Stop-Loss Placement: The upper and lower bands can serve as dynamic stop-loss levels.
  
• Breakout Confirmation: Trend flips can confirm breakout signals from other indicators.
  
• Mean Reversion Strategy Filtering: The 25-75 range helps identify strong versus weak reversals.
  

Risks & Disclaimers
Not a Standalone Strategy: This indicator should be used with other confirmation tools like volume analysis, momentum oscillators, or support/resistance levels.
False Signals in Sideways Markets: Although it reduces noise, choppy markets can still generate occasional false trend flips.
Market Adaptation Required: The best parameters may vary depending on the asset and timeframe.



This indicator was heavily inspired and influenced by the IRS/viResearch Median SuperTrend, improving upon its concept by transforming its median based calculation into a more responsive & effective counterpart of its former self.



Shoutout to all my Masterclass Brothers and L4 Gs!