Archived — below our codifiability bar

ADX, DMI, Risk Percentages Strategy

Discover a strategy using ADX, Positive DMI, and Negative DMI to identify trend strength. It buys when ADX is above a threshold and increasing, with inverse rul

Published · Archived · Methodology: Technical Indicators

  • Algo score: 55%
  • Discretionary score: 65%

This strategy was decoded from a public trading video but did not clear Strategy Decoder's codifiability bar: the extraction could not pin the rules down precisely enough to be turned into a reviewable specification. It is kept here as a reference post-mortem rather than as a strategy you can trade or backtest.

Part of: ADX / Trend Strength

  • Methodology: Technical Indicators
  • Content type: strategy

Indicators mentioned

  • ADX
  • Positive DMI
  • Negative DMI

Why this strategy was archived

ADX and the Directional Movement Index are Welles Wilder's trend-strength toolkit: ADX measures how forcefully a market is trending regardless of direction, while +DI and −DI compare upward and downward directional movement to indicate which side is in control. This entry decodes "Discover the Best TradeStation Indicator for Profitable Trading Strategies" from Algo Trading With Kevin Davey, which pairs that indicator family with an explicit discussion of risk sizing — a combination that is rarer in retail strategy content than it should be.

**Why this entry is archived.** Our extraction scored this video below the codifiability bar. The indicator components come through clearly — ADX alongside the positive and negative DMI lines, framed around percentage-based risk — but the operating conditions around them do not: no threshold values we could pin down for what counts as a tradeable ADX reading, no precise crossover or confirmation trigger, no stop and target definition, and no timeframe or market anchoring the setup. Those pieces are referenced in passing rather than specified, and reconstructing them would mean guessing. A rule set we cannot code faithfully does not belong in the active catalog, however sound the reasoning behind it.

**What it still offers.** The video is worth watching for its framing rather than its parameters. It treats indicator selection as a question to be tested rather than asserted, and it puts risk percentage in the same conversation as entry logic — which is where it belongs, and where most indicator tutorials leave a gap. If you are researching trend-strength filters, use this as orientation on how a systematic trader thinks about ADX and DMI, then see the trend-indicator concept hubs and the active catalog for entries where the full entry, exit, and risk rules were successfully extracted.

Source video

Decoded from: Discover the Best TradeStation Indicator for Profitable Trading Strategies by Algo Trading With Kevin Davey — watch the original

Key timestamps:

  • 0:00 - Introduction to TradeStation code
  • 0:04 - Indicators used: ADX, positive and negative DMI, risk percentages
  • 0:07 - Long entry condition: ADX value above a threshold and increasing
  • 0:10 - Short entry condition: Vice versa for short

Frequently asked questions

Why is this ADX and DMI strategy archived?

Our extraction identified the indicator components — ADX, +DMI, −DMI and percentage-based risk — but not the thresholds, triggers, exits, or timeframes needed to automate them. It scored below the codifiability bar we require for the active catalog.

What do ADX and DMI actually measure?

ADX measures trend strength without indicating direction, while +DI and −DI compare upward against downward directional movement to show which side is dominant. They are typically used together, with ADX acting as a filter on directional signals.

Is the video still useful to watch?

Yes — as orientation. It shows how a systematic trader approaches indicator selection and folds risk percentage into the strategy conversation, which is a discipline worth borrowing even when the specific parameters are not stated.

Where can I find codifiable ADX or trend-strength strategies?

The active catalog and the trend-indicator concept hubs list decoded video strategies where complete entry, exit, and risk rules were extracted.

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