How the SuperTrend + ATR Trailing Stop Works
The supertrend + atr trailing stop is one of the most widely-used signals in trading. It’s simple, mechanical, and removes emotional decision-making from your trading by generating clear entry and exit signals based on the SuperTrend indicator.
On QQQ, the SuperTrend acts as a trend filter. It won’t catch every exact bottom, but it reliably captures the meat of major moves while keeping you out of chop.
5-Year Performance on QQQ
Over five years (2021-11-01 → 2026-10-30), the SuperTrend + ATR Trailing Stop delivered a -37.6% total return on QQQ, compounding at -9.0% annually.
At -0.52, the SuperTrend earned less than one units of return for every unit of risk taken. For context, anything above 1.0 is considered good; above 1.5 is excellent.
The catch? A 37.7% max drawdown. At some point during this 5-year run, you’d have been down nearly 38% from peak equity. That’s stomach-churning territory for most traders. If you can’t handle that kind of drawdown, this isn’t for you — or you need to size down.
Risk Assessment
| Metric | Value | Verdict |
|---|---|---|
| Sharpe Ratio | -0.52 | ❌ Weak |
| Max Drawdown | 37.7% | ⚠️ Significant |
| Win Rate | 42.6% | ⚠️ Below average |
| Profit Factor | 0.81 | ❌ Unprofitable |
| Trades/Year | ~303 total | Active |
The profit factor of 0.81 tells the real story: when the SuperTrend fires, the winning signals don’t outweigh the losers. Combined with a 42.6% win rate, this requires careful position sizing to be profitable.
Does the SuperTrend + ATR Trailing Stop Work on QQQ?
The supertrend + atr trailing stop struggled to generate meaningful edge on QQQ over this 5-year period. With a -0.52 Sharpe ratio and 0.81 profit factor, the risk-adjusted returns are below what most systematic traders would consider acceptable.
This doesn’t mean the SuperTrend is useless — it may work better on different assets, timeframes, or when combined with other filters. But on QQQ with default parameters over 5 years, it didn’t produce a compelling standalone edge.
Our take: skip it on QQQ unless you’re combining it with other confirmations or using it on different timeframes.
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Data source: Yahoo Finance (yfinance). Backtest engine: backtrader. 95% position sizing. 0.1% commission per trade. Last refreshed: October 31, 2026. Not financial advice. Past performance does not guarantee future results.
Year-by-Year Breakdown
| Year | Return | Trades | Win Rate |
|---|---|---|---|
| 2021 | +2.8% | 9 | 42.6% |
| 2022 | -33.2% | 58 | 42.6% |
| 2023 | +55.9% | 63 | 42.6% |
| 2024 | +27.7% | 58 | 42.6% |
| 2025 | +21.0% | 65 | 42.6% |
| 2026 | +12.5% | 50 | 42.6% |
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