ADX best indi

We’ll start off by just testing the default DMI crossover strategy. We’ll buy when the 14-period DMI-plus crosses above the 14-period DMI-minus, and sell once the former crosses below the latter.

Here are the results:

As you see, the strategy seems to work well in bull markets. Still, this isn’t something we’d like to trade in its raw form!

So how could we go about improving the strategy?

We’ll one common approach is to demand that ADX is above 25. However, in our tests, we’ve found out that a low ADX reading actually works better, so let’s try that!

We require that DMI-plus is above DMI-minus and that the 14-period ADX is below 20, to enter a trade.