ADX and MACD Trend Confluence with Percentage Exits
Summary
This trend-following system combines ADX, directional indicators, and MACD. It considers a long when +DI exceeds -DI, MACD is above its signal line, and ADX is above a threshold; a short uses the opposite directional and momentum conditions. The listed default ADX threshold is 25. At entry, the code sets percentage-based stop and target levels, with defaults of 1% and 2%, and uses 10% of equity as the position size.
The explanation highlights the intent to avoid weak trends through an ADX filter, while noting that lagging indicators can enter late and fixed percentage exits do not adapt to changing volatility. It also discusses parameter sensitivity and technical risks associated with external trade automation. The source includes indicator calculations and trade rules, but the document supplies no performance results. Its backtest settings specify DOGE/USDT futures on daily bars from May 2024 to May 2025. Suggestions such as ATR-based exits, higher-timeframe confirmation, and staged profit taking are future modifications, not tested findings; the automation claims likewise are not demonstrated by the provided code.
Key ideas
- A long requires +DI above -DI, MACD above its signal line, and ADX above the threshold.
- A short uses the opposite DI and MACD relationships while retaining the ADX strength filter.
- The defaults set a 1% stop, a 2% target, and a 10% equity position size.
- Fixed percentage exits and lagging indicators can behave poorly when volatility changes or trends reverse.
- The published DOGE/USDT futures settings provide no results to assess strategy performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.