Moving-Average Rejection Entries Filtered by ADX Trend Strength
Summary
The strategy combines fast, average, and slow weighted moving averages with an ADX trend-strength filter. A potential long setup occurs when price probes below the slow average and closes back above it; the close must also be above the fast average. Entry then requires the fast average to cross above the average-length line while ADX exceeds a threshold. Short setups apply the corresponding conditions in the opposite direction. The described exits occur when price crosses the slow average against the open position.
The document gives example defaults for the moving-average lengths and ADX settings, along with BTC/USDT futures backtest dates, but no performance metrics or trade evidence. It cautions that moving averages and ADX lag, that choppy markets may still produce false signals, and that results depend on parameter choices. The suggested additions—other indicators, market-specific settings, stop-loss rules, and position sizing—are potential refinements, not tested findings. The code manually constructs ADX from smoothed directional movement and true range, so implementations should verify that calculation and the entry and exit logic before relying on it.
Key ideas
- Long and short entries combine a rejection of the slow moving average with confirmation from the fast average.
- A fast-average crossover of the average line and ADX above a threshold complete the entry conditions.
- Positions are closed when price crosses the slow average in the adverse direction.
- The published material provides parameter defaults and a backtest window but no reported performance results.
- Lag, choppy-market signals, parameter sensitivity, and absent explicit stop-loss rules are practical limitations.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.