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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 TDG?

ADX: trade only in strong trends does not beat buy-and-hold on TDG: -25.5 points a year over 20 years.

Total return
35.7%
Buy and hold
×134
CAGR
1.5%
Sharpe
-0.01
Max drawdown
-54.7%
Trades
694
Out of sample
overfit
Years
20
1×10×100×2007200920112013201520172019202120232025
StrategyTDG

Findings

  1. ADX: trade only in strong trends does not beat buy-and-hold on TDG: -25.5 points a year over 20 years.
  2. Against the S&P 500 over the same window: -9.5 points a year.
  3. Total return +35.7% versus ×134 for buy-and-hold, with 694 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -54.7%.
  6. It beats in neither half of the history (split at 2016).
  7. It ranks #124 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 TDG 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)

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How to cite

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

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