WMA Trend Signals Filtered by ADX and Directional Indicators
Summary
This strategy pairs a weighted moving average with ADX and the positive and negative directional indicators to identify trend conditions. The WMA smooths price data, while ADX acts as a trend strength filter and the relative values of +DI and -DI indicate direction. It enters long when ADX is above its threshold and +DI exceeds -DI, then closes the long when ADX remains above the threshold and -DI exceeds +DI.
The document lists default indicator settings and a BTC/USDT futures backtest configuration covering about one month on an hourly chart. It provides no performance statistics or trade results, so claims of stable live performance and effective signal filtering are not supported by evidence in the document. The stated risks include sharp market moves that indicators may not capture and sensitivity to parameter choices. Stop losses, additional filters, and parameter or holding-period adjustments are proposed as possible improvements.
Key ideas
- ADX above a threshold gates trades, while the relative direction indicators select long exposure or close it.
- A weighted moving average smooths price data and is plotted with colors reflecting ADX and directional movement.
- The documented BTC/USDT futures backtest settings do not include reported performance results.
- The strategy may react poorly to sharp moves, and its effectiveness depends on indicator settings.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.