ADX and RSI Trend-Momentum Entries with ATR Targets and Stops

Summary

This long-only system combines directional trend strength with momentum confirmation. It requires ADX above 18, positive directional movement exceeding negative directional movement, and rising ADX. It also requires RSI to be above its moving average and rising, with a fresh crossover above 60 to trigger entry. At entry, the strategy sets a profit target 2.5 times ATR above the closing price and a stop 1.5 times ATR below it; positions close when price reaches either level.

The description presents the approach as suitable for one-minute options trading, but the published backtest settings instead specify daily ETH/USDT data over roughly a year. No performance results are given, and that mismatch leaves its intended application uncertain. The document notes that fast markets can cause slippage, false momentum signals can occur, and ranging conditions may produce repeated stops. Its source also records ATR-based levels from entry and does not describe trailing adjustments, so the targets remain fixed for each trade.

Key ideas

• A long entry requires rising ADX above 18 and positive directional movement above negative directional movement.
• RSI must be rising above its moving average and cross above 60 to confirm momentum.
• The target and stop are set at 2.5 and 1.5 times entry ATR, respectively.
• The stated one-minute options use conflicts with daily ETH/USDT backtest settings.
• Slippage, false signals, and ranging markets are identified as risks.

Tags

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