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Finaxion Research · ADX: trade only in strong trends · indices and ETFs · Recomputed 2026-09-10

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

ADX: trade only in strong trends does not beat buy-and-hold on QQQ: -6.8 points a year over 27 years.

Total return
193.6%
Buy and hold
×17
CAGR
4.0%
Sharpe
0.07
Max drawdown
-36.8%
Trades
885
Out of sample
overfit
Years
27
1×10×17×20002002200420062008201020122014201620182020202220242026
StrategyQQQ

Findings

  1. ADX: trade only in strong trends does not beat buy-and-hold on QQQ: -6.8 points a year over 27 years.
  2. Against the S&P 500 over the same window: -4.6 points a year.
  3. Total return +193.6% versus ×17 for buy-and-hold, with 885 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -36.8%.
  6. It beat before 2012 and stopped afterwards.
  7. It ranks #52 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 QQQ 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 QQQ → · Full page for ADX: trade only in strong trends →

How to cite

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

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