Long-Only ADX and Moving-Average Trend-Following Strategy

Summary

This strategy combines a rising ADX reading with price above both a simple moving average and an exponential moving average to enter long positions. It exits when ADX falls or price drops below either average. The published defaults set ADX smoothing and DI length to 14, and both moving-average periods to 50. The stated backtest configuration uses BTC/USDT futures on Binance, with daily bars and a one-hour base period over roughly a year; the document reports no performance results.

The approach aims to filter entries through trend strength and price confirmation, but ADX is lagging and the strategy cannot profit from falling prices. Reversals can still cause losses, and outcomes depend on parameter choices. Suggested additions include stop-loss rules, position sizing, and parameter evaluation. The document also proposes machine-learning adjustment and a martingale variant, but supplies no evidence that these changes improve results. Treat its claims of stability and fewer invalid trades as assertions rather than demonstrated findings.

Key ideas

• Long entries require ADX to rise while price is above both moving averages.
• Positions close when ADX falls or price moves below either average.
• The published parameter defaults use 14-period ADX settings and 50-period moving averages.
• A long-only design avoids short positions but cannot capture declines and may lag at turning points.
• The document provides backtest settings but no measured performance results.

Tags

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