Trend Following with ADX, TTI, and Volume Price Confirmation

Summary

This strategy combines three indicators to seek upward trends supported by trading volume. ADX measures trend strength without indicating direction; the method requires it to exceed 30. TTI compares fast and slow volume weighted averages and uses its signal line to indicate upward momentum. VPCI combines price and volume, with a positive reading serving as confirmation.

A long entry is triggered when all three conditions are met: ADX is above 30, TTI is above its signal line, and VPCI is positive. The strategy closes positions when VPCI falls below zero. The document provides indicator definitions, default parameter values in the accompanying script, and a description of the entry and exit rules, but gives no backtest results or performance evidence. It identifies lag, whipsaws, trading costs, trend reversals, and parameter sensitivity as possible limitations. Suggested improvements include testing across markets and timeframes, adjusting parameters, adding filters, and applying explicit stop losses or profit targets.

Key ideas

• ADX above 30 is used to identify sufficiently strong trends, but does not establish their direction.
• TTI above its signal line indicates the upward direction required for a long entry.
• A positive VPCI reading is used to confirm that volume supports the price movement.
• The strategy enters long only when all three indicator conditions hold and exits when VPCI turns negative.
• The document describes possible filters and risk controls but supplies no empirical results to validate the strategy.

Tags

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