Strategy review
ADX + 20MA Pullback — “The Single Setup”
Reviewed video: “This single setup can take your trading to next level”
The claim
Trade only when ADX(14) > 25 (strong trend); buy pullbacks to the 20 & 50 moving averages; trail the stop at 50MA − 1.8×ATR. Buy calls when trending up.
How we tested it
Mechanized on daily data across 159 large/mid-caps and 138 small-caps over 8 years, with vs without the ADX>25 filter, 0.25% round-trip cost. Year-by-year regime check.
The data
| Metric | Value |
|---|---|
| 20MA pullback, no filter (large) | +0.06R |
| + ADX>25 filter (large) | +0.27R |
| 20MA pullback, no filter (small) | +0.16R |
| + ADX>25 filter (small) | +0.42R |
₹2,00,000 track record
Backtested as a ₹2,00,000 portfolio: up to 5 positions at once, risking 1% of equity per trade, profits compounded. Monthly returns (% of account) below — yellow = up red = down.
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Year | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | -5 | -0 | +0 | -1 | +4 | -0 | -0 | +4 | +1% | ||||
| 2020 | -0 | +2 | -4 | -1 | -0 | +2 | +4 | -1 | +4 | +4% | |||
| 2021 | +1 | +4 | +7 | -1 | +0 | +2 | -0 | -0 | +3 | -1 | +5 | -2 | +20% |
| 2022 | -2 | -1 | -3 | -4 | -2 | -0 | -0 | +0 | +1 | -1 | -0 | +1 | -10% |
| 2023 | +0 | -1 | -1 | -1 | -3 | +5 | +1 | +1 | +4 | -1 | +5% | ||
| 2024 | +2 | +5 | +4 | -1 | +2 | +2 | +2 | +6 | +1 | -1 | +3 | -1 | +26% |
| 2025 | -3 | -2 | +0 | -0 | +0 | +7 | -1 | +0 | -0 | -0 | +2 | +0 | +3% |
| 2026 | -1 | +0 | -5 | -0 | -0 | +2 | -5% |
Our verdict
The best strategy we've tested — and the only one where adding a filter improved the edge. The ADX>25 trend-strength gate roughly triples expectancy (small-cap +0.42R/trade, payoff 3.2×) while cutting trades by two-thirds. It's genuinely sound trend-following.
But it's still regime-dependent: hugely positive in 2020/2023 bull years, negative in 2025 and 2026. It's long-only equity (survivorship-inflated in small-caps), and must be traded as equity — the call-buying overlay pays the volatility tax and erases the edge. Not a money-machine, but the ADX filter is a real, reusable insight.
Bottom line
★★★½☆ 3.5/5