ADX-Filtered SMA Crossovers with Stops and Session Close

Summary

This strategy enters long when closing price crosses above a short simple moving average and short when it crosses below, provided ADX exceeds a trend-strength threshold. The defaults are a three-period SMA and a 15-period ADX with a threshold of 15. The source calculates ADX from directional movement and true range, then places a fixed take-profit, stop-loss, and trailing stop for each entry. It also closes open positions at a specified session time and can emit structured trade alerts.

The document frames ADX as a filter for reducing crossover signals during weak or sideways conditions, but supplies no backtest results to validate that claim. It identifies several limitations: the short average may be sensitive, ADX can confirm trends late, and fixed point exits may not adapt to changing volatility. The code shown does not include the stated higher-timeframe analysis or adaptive risk settings; these are proposed improvements, along with ATR-based exits and market-state filters. Session-time behavior depends on the chart’s time basis.

Key ideas

• Price crossing a short SMA generates a directional signal only when ADX exceeds its threshold.
• The example uses fixed profit, loss, and trailing distances to manage exits.
• Open positions are forced closed at the configured session time.
• ADX filtering may be delayed, and short averages can produce frequent signals.
• The document recommends testing volatility-adaptive exits but provides no results.

Tags

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