ADX-Gated Box Breakouts with Range-Based Stops and Targets

Summary

This strategy uses the Average Directional Index (ADX) to identify periods of weak trend strength, then trades breaks of a recent price range. It calculates the range from the previous 20 bars and considers a breakout only when ADX is below 18; the documented ADX and smoothing periods are both 14. The range boundaries are carried forward while a position is open, so the trade's exit distances remain tied to the entry box.

The default target is one box width and the stop is half a box width. Long and short entries can be enabled independently. The document describes the method and gives BTC/USDT futures backtest dates and chart intervals, but provides no outcome statistics or evidence of profitability. It notes that ADX, box length, and exit multipliers need testing across markets, and that poor settings may miss trends or produce unsuitable risk distances. The published source should also be read closely: its direction conditions appear reversed relative to their labels, and its breakout checks use a cross in either direction rather than explicitly requiring an upward or downward cross.

Key ideas

• The strategy treats low ADX as a consolidation regime and uses recent highs and lows as breakout boundaries.
• The documented defaults use ADX periods of 14, a threshold of 18, and a 20-bar box.
• The target distance is one box width and the stop distance is half a box width by default.
• Long and short trading directions can be selected independently.
• The document reports no backtest results, and the source's direction checks appear inconsistent with the stated long and short labels.

Tags

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