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BACKTESTING · ADX TREND FILTER

ADX Trend Filter Backtest in Crypto: Fees, Slippage and Break-Even Costs

An ADX filter lets a strategy trade only when trend strength is above a threshold. It removes some chop and delays entries.

By ChartsPod Editorial Team · Reviewed by ChartsPod Research
Published · Updated · 5 min read

Short answer

An ADX trend filter allows entries only when ADX is above a threshold (often 20–25). Because ADX is double-smoothed, it rises after a trend is underway, so the filter removes some range trades but also delays entries into new trends. Compare the base strategy with and without the filter on break-even cost, trade count and profit share from the largest trends, and test the threshold as a parameter. Use closed-bar ADX values to match history.

Break-even cost

ItemValue (illustrative)
Trades150
Gross avg per trade+0.44%
Fees (2 × 0.05%)−0.10%
Slippage (2 × 0.03%)−0.06%
Net avg per trade+0.28%
Break-even round-trip cost0.44%
Adx Trend Filter: edge vs cost per trade (%)Adx Trend Filter: edge vs cost per trade (%): Gross edge 0.44 %; Fees 0.10 %; Fees + slippage 0.16 %.ADX TREND FILTER: EDGE VS COST PER TRADE (%)Gross edge0.44 %Fees0.10 %Fees + slippage0.16 %
Edge per trade versus cost per trade. Original ChartsPod editorial graphic.

With vs without the filter

VersionTradesGross avgNet avg (illustrative)
No filter320+0.20%+0.06%
ADX > 25150+0.44%+0.30%
ADX > 3560+0.52%+0.38% (few trades)
Illustrative trades by filter levelIllustrative trades by filter level: None 320 trades; ADX > 25 150 trades; ADX > 35 60 trades.ILLUSTRATIVE TRADES BY FILTER LEVELNone320 tradesADX > 25150 tradesADX > 3560 trades
Higher thresholds: better averages, smaller samples. Original ChartsPod editorial graphic.

Conclusion

Related: ADX in Crypto: Why the Value Changes Before Candle Close, A Profitable Crypto Backtest With 20 Trades: Is the Sample Useful?.

Backtest the adx trend filter rule with costs in ChartsPod.

Open the ChartsPod terminal

Use closed-bar ADX values to match history.

Put ADX Trend Filter Backtest in Crypto next to price, flow and positioning in one workspace.

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Questions readers ask

Why use an ADX filter?

To avoid trading in weak-trend conditions.

What threshold?

20–25 is common; test it.

Does it delay entries?

Yes; ADX lags.

Sources and methodology

Backtest cost logic follows TradingView's Pine Script strategy documentation; indicator definitions are standard. All performance numbers are illustrative examples of the method, not results of real tests.

  1. TradingView Pine Script: Strategies — simulated fills and assumptions.
  2. TradingView Pine Script: Repainting — live vs historical calculation.
  3. ChartsPod documentation — guides for order flow, derivatives, alerts, backtests, journal and workspaces.

This article explains research tools and workflows. It is not financial advice, does not recommend buying or selling any asset and does not predict prices. Crypto derivatives carry a risk of rapid and total loss of margin.

CHARTSPOD EDITORIAL EDITION · RESEARCH AND EDUCATION ONLY · NOT FINANCIAL ADVICE.