RSI and ADX Filters for Long-Term Trend Following

Summary

This strategy combines a rising 20-day simple moving average with changes in ADX and RSI readings to seek long positions during upward trends. It describes two entry paths: one allows RSI below 85 when ADX rises by more than 0.2, while another requires RSI below 50 when ADX rises by less than 0.2. Exit logic uses an overbought RSI reading alongside ADX conditions, or a downward turn in the moving average. The article also discusses stop losses and parameter adjustments as risk controls.

The document gives rules and parameter examples, plus a published test setup for BTC_USDT futures, but reports no performance results. It warns that ADX can lag turning points, that sharp declines can outpace stops, and that parameter choices can cause premature exits or prolonged overbought exposure. Some exit details in the prose and source are difficult to reconcile, so the rules should be checked carefully before implementation.

Key ideas

• A rising 20-day SMA is a required filter for both described long entry paths.
• ADX change and RSI thresholds distinguish the two entry setups.
• The exit description combines overbought RSI readings with ADX conditions or a falling SMA.
• ADX lag and abrupt price drops can leave positions exposed before exits take effect.
• The published test setup identifies an instrument and date range but supplies no performance results.

Tags

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