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Finaxion Research · ADX: trade only in strong trends · single stocks · Recomputed 2026-09-10

Does ADX: trade only in strong trends work on CB?

ADX: trade only in strong trends does not beat buy-and-hold on CB: -14.8 points a year over 33 years.

Total return
-36.8%
Buy and hold
×67
CAGR
-1.4%
Sharpe
-0.16
Max drawdown
-79.5%
Trades
1140
Out of sample
overfit
Years
33
1×10×19941997200020032006200920122015201820212024
StrategyCB

Findings

  1. ADX: trade only in strong trends does not beat buy-and-hold on CB: -14.8 points a year over 33 years.
  2. Against the S&P 500 over the same window: -12.2 points a year.
  3. Total return -36.8% versus ×67 for buy-and-hold, with 1140 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -79.5%.
  6. It beats in neither half of the history (split at 2009).
  7. It ranks #182 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 CB 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 CB → · Full page for ADX: trade only in strong trends →

How to cite

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

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