ADX and DMI Trend Strategy with Quality Scoring

Summary

This Pine strategy combines directional movement and ADX with an EMA trend filter to organize trend trades. Its configurable inputs cover DI and ADX lengths, minimum ADX and DI spread thresholds, pullback entries using a faster EMA, and optional reversal exits. The visible source also defines ATR-based initial stops, a Chandelier trailing stop, a cooldown after exits, and a trend quality score built from ADX level, DI spread, ADX slope, and EMA slope. Position size can be adjusted according to that score.

The document is a strategy script excerpt, not a performance study. It provides no instrument, timeframe, backtest results, or evidence that the filters improve returns. The excerpt ends during the core calculations, so the precise score formula, entry and exit conditions, and interaction among settings cannot be fully assessed. Its many adjustable thresholds also leave parameter selection and robustness unaddressed.

Key ideas

• The strategy uses ADX and DI spread thresholds to filter potential trend trades.
• An EMA filter can constrain trade direction, while a faster EMA supports pullback entries.
• ATR-based initial stops and an optional Chandelier stop define risk controls.
• Trend quality combines ADX level, DI spread, ADX slope, and EMA slope inputs.
• Optional score-based sizing, reversal exits, and cooldown settings make behavior configurable.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.