Combining 2/20 EMA Signals with ADXR Trend Strength

Summary

This timing approach combines a 2/20 EMA signal with ADXR, a smoothed measure derived from ADX, to filter directional positions. The source calculates an EMA-based position state and an ADXR state; it enters long or short only when both states agree, and closes all positions when they no longer align. It also offers an option to reverse the resulting signals. ADXR thresholds and lookback lengths are configurable, with example defaults of 14 for its ADX and ADXR periods and thresholds of 13 and 45.

The document frames ADXR as a way to assess trend strength while smoothing changes in ADX, but its description of the exact moving-average and threshold logic is not fully consistent with the source. The published settings specify a two-hour BTC-USDT futures test over about a month, without performance results. Risks include false signals, poor performance in ranges, and sensitivity to fixed EMA and ADXR parameters; the text suggests testing adaptive settings and adding explicit risk controls.

Key ideas

• The strategy requires agreement between an EMA-based direction state and an ADXR state before taking a position.
• ADXR averages current ADX with a lagged ADX value to smooth the trend-strength reading.
• An optional setting reverses the combined signals.
• The published backtest settings do not include performance results.

Tags

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