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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 RCL?

ADX: trade only in strong trends beats buy-and-hold on RCL by +0.7 points a year over 33 years.

Total return
×57
Buy and hold
×47
CAGR
12.9%
Sharpe
0.41
Max drawdown
-52.9%
Trades
1054
Out of sample
overfit
Years
33
1×10×19941997200020032006200920122015201820212024
StrategyRCL

Findings

  1. ADX: trade only in strong trends beats buy-and-hold on RCL by +0.7 points a year over 33 years.
  2. Against the S&P 500 over the same window: +2.0 points a year.
  3. Total return ×57 versus ×47 for buy-and-hold, with 1054 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -52.9%.
  6. It beat before 2009 and stopped afterwards.
  7. It ranks #17 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 RCL 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 RCL → · Full page for ADX: trade only in strong trends →

How to cite

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

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