DI Trend Signals with an SMA Filter and ATR-Based Exits
Summary
This trend-following system uses positive and negative directional indicators to identify market direction. A trade signal requires one DI value to exceed the other by a specified strength threshold, with price also on the confirming side of a simple moving average. The strategy then sets stop-loss and take-profit levels using multiples of average true range, so the distances reflect recent volatility. It also describes time restrictions intended to limit trade frequency.
The document outlines parameter defaults and published backtest settings for BTC/USDT futures on daily bars, spanning late 2019 to early 2025. It gives no backtest results, performance measures, or evidence that the proposed filters improve reliability. The source calculates an ADX smoothing input but does not use the resulting ADX in its entry conditions; the written discussion suggests ADX as a possible future addition. Risks include repeated stop-outs in sideways markets, slippage during volatile periods, false trend transitions, and parameter sensitivity. The proposed responses include testing parameter ranges and considering volume or other filters.
Key ideas
- DI+ and DI− determine direction, subject to a minimum difference threshold.
- Price must also confirm the direction by its position relative to a simple moving average.
- ATR multiples define initial stop-loss and take-profit levels.
- The document describes backtest settings but does not report performance results.
- Sideways markets, slippage, false signals, and parameter sensitivity are listed as risks.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.