DMI and ADX Trend Strategy with Pullback Entries and Quality-Based Sizing

Summary

This strategy combines directional movement indicators and ADX with an EMA trend filter to identify bullish or bearish regimes. Entries can follow a pullback through a fast EMA and its reclaim, or use a directional indicator crossover. Optional minimum ADX and directional spread filters gate trades, while a weighted trend score combines ADX level, DI spread, ADX slope, and EMA slope. The score assigns quality tiers and can scale position size alongside a base equity-risk setting.

Exits combine an ATR-based initial stop with an optional chandelier trail, directional crossover exits, and an ADX-decay exit measured from the post-entry peak. A cooldown can delay subsequent entries. The script also tracks closed trades by entry ADX bands and displays win rates, but the document provides no actual backtest results or validation of these statistics. Outcomes depend on instrument, timeframe, execution, and configurable thresholds; the score and risk sizing are rule-based heuristics rather than demonstrated predictive measures.

Key ideas

• The strategy defines direction using DI alignment, ADX strength, and an optional EMA filter.
• Entries use either a fast-EMA pullback and reclaim or a DI crossover within an eligible trend regime.
• A weighted score of ADX level, DI spread, and indicator slopes can adjust position size by quality tier.
• Stops combine an ATR-based initial distance with an optional chandelier trail, while reversal and ADX decay can close trades.
• The dashboard reports win rates by entry ADX band, but no sample results or independent validation are supplied.

Tags

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