FINAXIONResearch
Finaxion Research · ADX: trade only in strong trends · cryptocurrencies · Recomputed 2026-09-10

Does ADX: trade only in strong trends work on BTC/USD?

ADX: trade only in strong trends beats buy-and-hold on BTC/USD by -8.0 points a year over 12 years.

Total return
×690
Buy and hold
×172
CAGR
45.8%
Sharpe
1.11
Max drawdown
-49.9%
Trades
391
Out of sample
—
Years
12
1×10×100×824×201520162017201820192020202120222023202420252026
StrategyBTC/USD

Findings

  1. ADX: trade only in strong trends beats buy-and-hold on BTC/USD by -8.0 points a year over 12 years.
  2. Against the S&P 500 over the same window: +32.0 points a year.
  3. Total return ×690 versus ×172 for buy-and-hold, with 391 trades.
  4. Maximum drawdown -49.9%.
  5. It beat before 2020 and stopped afterwards.
  6. It ranks #1 of 235 markets for this strategy by annual excess over the S&P 500.

Findings derived from the full panel. Each carries its number and its denominator; the computations are reproducible with artifact 5bea546c394a.

Exactly what was tested

Long while +DI(14) is above −DI(14); flat when −DI overtakes +DI. Next-close execution.

How to read it

The verdict compares the strategy with buying and holding BTC/USD over the same window, with round-trip costs per asset class. “Out of sample” is walk-forward: the rule is fit on one stretch and judged on the next. A result that beats in the full sample but not out of it is overfit. Full methodology in the protocol. How we test.

Open this backtest with its trades   Trades (CSV)

Every strategy on BTC/USD → · Full page for ADX: trade only in strong trends →

How to cite

Finaxion Research (2026). Does ADX: trade only in strong trends work on BTC/USD?. Daily backtest 1962-01-01–2026-08-31, artifact 5bea546c394a. https://finaxion.app/en/research/adx-trend-filter/btc-usd

Not a recommendation. Past performance does not guarantee future results.