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

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

ADX: trade only in strong trends does not beat buy-and-hold on HIG: -8.3 points a year over 31 years.

Total return
-9.2%
Buy and hold
951.1%
CAGR
-0.3%
Sharpe
-0.03
Max drawdown
-69.4%
Trades
996
Out of sample
overfit
Years
31
1×10×19961999200220052008201120142017202020232026
StrategyHIG

Findings

  1. ADX: trade only in strong trends does not beat buy-and-hold on HIG: -8.3 points a year over 31 years.
  2. Against the S&P 500 over the same window: -10.7 points a year.
  3. Total return -9.2% versus +951.1% for buy-and-hold, with 996 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -69.4%.
  6. It beat before 2011 and stopped afterwards.
  7. It ranks #148 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 HIG 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 HIG → · Full page for ADX: trade only in strong trends →

How to cite

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

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