25-75 Percentile SuperTrend

The 25-75 Percentile SuperTrend indicator is a trend-following tool that improves upon the traditional SuperTrend concept by utilizing percentile-based smoothing to create more adaptive and noise-resistant trend levels.

Usage

The indicator can be used to identify trend direction, potential entry points, and dynamic stop-loss levels. A bullish trend is established when the price remains above the lower percentile-based band, while a bearish trend is identified when the price stays below the upper percentile-based band.

• Trend Following: Users can follow the color-coded bars and lines to stay on the right side of market momentum.
• Stop-Loss Placement: The dynamic bands (upper for shorts, lower for longs) act as trailing exit points that adjust based on market volatility.
• Breakout Confirmation: Shifts in the trend color and line position can confirm breakouts from consolidation zones or other technical patterns.

Details

Unlike the standard SuperTrend which typically offsets from a moving average or median price, this version calculates the 25th and 75th percentiles of the source price over a specific lookback period.

• Percentile Smoothing: The 25th percentile serves as the basis for the lower band (support in an uptrend), while the 75th percentile serves as the basis for the upper band (resistance in a downtrend).
• ATR Integration: Standard Average True Range (ATR) logic is still applied as a multiplier to these percentile levels, creating a buffer that accounts for current market volatility.
• Noise Reduction: Because percentiles are less sensitive to extreme outliers than simple averages, this indicator effectively filters out market "noise" and reduces the frequency of false signals (whipsaws) in choppy conditions.

This tool was inspired by the concept of Median-based SuperTrends, extending the logic to a 25/75 distribution for increased responsiveness.

Settings

• Supertrend length: Sets the period used for the ATR calculation.
• Multiplier: The value used to multiply the ATR, determining the distance of the bands from the percentile source.
• Percentile length: The lookback period used to calculate the 25th and 75th percentile ranks.
• Median smoothing source: The price source (e.g., High, Close) used for the percentile calculations.

FAQ

How do I use the 25-75 Percentile SuperTrend?

You can use it to identify the prevailing market trend; green visuals indicate bullish momentum, while red visuals indicate bearish momentum. It is best used in conjunction with volume or momentum oscillators.

How does this differ from a regular SuperTrend?

Instead of using a single average, it uses two different percentile levels (25th and 75th) to anchor the bands, making it more adaptive to the distribution of recent price action.

Where can I access this tool?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.