ADX Strategy Templates

Strategy Overview

1. ADX Trend Filter + EMA Direction — adx_above_threshold with EMA for directional trades
2. ADX Regime Switch — Use ADX level to toggle between trend and mean-reversion modes
3. ADX Breakout Confirmation — Confirm breakouts when ADX is rising

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Strategy 1: ADX Trend Filter + EMA Direction

Overview

Use ADX to confirm trend exists, EMA for direction, RSI for entry timing.

When This Works Best

• Trending markets
• 4H to 1D timeframes

Algorithm Configuration

Setting	Value
Type	BOTH
Position Size	50% of equity (REL)
Order Type	MARKET
Timeout	COOLDOWN_ONLY, 3 bars

Long Entry Conditions

Group	Indicator	Signal	Threshold
Required	ADX	adx_above_threshold	25
Required	EMA	price_above_ema	—
Required	RSI	rsi_below_threshold	40

Long Exit Conditions

Setting	Value
Required	ADX · adx_below_threshold · 20
Stop Loss	5% (REL), trailing
Take Profit	10% (REL)

Short Entry Conditions

Group	Indicator	Signal	Threshold
Required	ADX	adx_above_threshold	25
Required	EMA	price_below_ema	—
Required	RSI	rsi_above_threshold	60

Short Exit Conditions

Setting	Value
Required	ADX · adx_below_threshold · 20
Stop Loss	5% (REL), trailing
Take Profit	10% (REL)

Recommended Parameters

Indicator	Parameter	Value	Notes
ADX	DI Period	14	Standard
ADX	Threshold	25	Trend filter
EMA	Period	20 bars	Direction
RSI	Period	14	Entry timing

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Strategy 2: ADX Mean Reversion Mode

Overview

When ADX signals no trend (<20), trade RSI extremes for mean-reversion.

When This Works Best

• Ranging/sideways markets
• After strong trends exhaust
• 1H to 4H timeframes

Algorithm Configuration

Setting	Value
Type	BOTH
Position Size	35% of equity (REL)
Order Type	MARKET
Timeout	COOLDOWN_ONLY, 5 bars

Long Entry Conditions

Group	Indicator	Signal	Threshold
Required	ADX	adx_below_threshold	20
Required	RSI	rsi_below_threshold	30

Long Exit Conditions

Setting	Value
Required	RSI · rsi_above_threshold · 55
Stop Loss	3% (REL)
Take Profit	6% (REL)

Short Entry Conditions

Group	Indicator	Signal	Threshold
Required	ADX	adx_below_threshold	20
Required	RSI	rsi_above_threshold	70

Short Exit Conditions

Setting	Value
Required	RSI · rsi_below_threshold · 45
Stop Loss	3% (REL)
Take Profit	6% (REL)

Recommended Parameters

Indicator	Parameter	Value	Notes
ADX	Threshold	20	Ranging filter
RSI	Period	14	Momentum

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Strategy 3: ADX Rising Trend Confirmation

Overview

Enter when ADX crosses above its signal line, confirming trend acceleration.

When This Works Best

• Early trend stages
• Post-consolidation breakouts
• 4H to 1D

Algorithm Configuration

Setting	Value
Type	BOTH
Position Size	40% of equity (REL)
Order Type	MARKET
Timeout	REGULAR, 3 bars

Long Entry Conditions

Group	Indicator	Signal	Threshold
Required	ADX	adx_above_signalLine	—
Required	EMA	price_above_ema	—

Long Exit Conditions

Setting	Value
Required	ADX · adx_below_signalLine
Stop Loss	5% (REL)
Take Profit	10% (REL)

Short Entry Conditions

Group	Indicator	Signal	Threshold
Required	ADX	adx_above_signalLine	—
Required	EMA	price_below_ema	—

Short Exit Conditions

Setting	Value
Required	ADX · adx_below_signalLine
Stop Loss	5% (REL)
Take Profit	10% (REL)

Recommended Parameters

Indicator	Parameter	Value	Notes
ADX	Period	14	Standard
ADX	Signal Line	9	Smoothing
EMA	Period	20	Direction

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Backtesting Recommendations

• Test ADX threshold levels: 20 vs 25 vs 30 for trend filtering
• Compare with and without ADX filter: Quantify the improvement
• Test ADX period: 10 vs 14 vs 20 for responsiveness

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Note

Pro Tip: When building strategies in Reversion, put your primary signal in the Required group and confirmation signals in Optional. This ensures the core signal must always be present while allowing flexibility in confirmation. Always backtest parameters per asset — crypto often benefits from adjusted settings due to higher volatility.