ADX and MACD Confluence for Directional Signal Changes

Summary

This indicator combines directional movement and MACD conditions to label a market as bullish or bearish. A bullish state requires the positive directional indicator to exceed the negative one and the MACD line to exceed its signal line. The bearish state requires both relationships to reverse. The state persists until the opposite condition appears, and a change of state produces a buy or sell marker; candle colors can also show the current alignment.

The published settings use an ADX length of 14 with smoothing of 10, and MACD lengths of 12, 26, and 9. Backtest settings identify BTC/USDT futures on a four-hour period over roughly one year, but the document contains no measured results. Despite the title’s reference to ADX, the code does not use the ADX value itself as a threshold or filter; it uses the positive and negative directional components. It also provides no exit, stop-loss, or position-sizing rules, so the signals alone do not define a complete risk-managed strategy.

Key ideas

• Bullish alignment requires the positive directional component above the negative component and MACD above its signal line.
• Bearish alignment requires the reverse directional and MACD relationships.
• The indicator keeps its prior directional state until the opposite alignment occurs.
• The shown settings and backtest context do not establish performance, and no risk or exit rules are specified.

Tags

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