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BACKTESTING · DMI DIRECTIONAL FILTER

DMI Directional Filter Backtest in Crypto: Fees, Slippage and Break-Even Costs

The Directional Movement Index compares +DI and −DI to say which side has been pushing. As a filter it's a direction check, distinct from ADX's strength check.

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

Short answer

+DI and −DI measure smoothed upward and downward movement; ADX measures how strong the difference is. A DMI directional filter allows longs only when +DI is above −DI (often combined with ADX above a threshold). Crossovers of +DI and −DI can whipsaw in ranges. Compare a base strategy with: no filter, +DI > −DI, and +DI > −DI with ADX > 20, on trade count and break-even cost.

Break-even cost

ItemValue (illustrative)
Trades120
Gross avg per trade+0.52%
Fees (2 × 0.05%)−0.10%
Slippage (2 × 0.04%)−0.07%
Net avg per trade+0.35%
Break-even round-trip cost0.52%
Dmi Directional Filter: edge vs cost per trade (%)Dmi Directional Filter: edge vs cost per trade (%): Gross edge 0.52 %; Fees 0.10 %; Fees + slippage 0.17 %.DMI DIRECTIONAL FILTER: EDGE VS COST PER TRADE (%)Gross edge0.52 %Fees0.10 %Fees + slippage0.17 %
Edge per trade versus cost per trade. Original ChartsPod editorial graphic.

Filter variants

VariantTradesNet avg (illustrative)
None300+0.05%
+DI > −DI170+0.21%
+DI > −DI and ADX > 20120+0.43%
Illustrative net avg (%)Illustrative net avg (%): None +0.05 %; +DI > −DI +0.21 %; +ADX > 20 +0.43 %.ILLUSTRATIVE NET AVG (%)None+0.05 %+DI > −DI+0.21 %+ADX > 20+0.43 %
Direction plus strength filtered most noise. Original ChartsPod editorial graphic.

Conclusion

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

Backtest the dmi directional filter rule with costs in ChartsPod.

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Compare a base strategy with: no filter, +DI > −DI, and +DI > −DI with ADX > 20, on trade count and break-even cost.

Review DMI Directional Filter Backtest in Crypto with bar replay before using it live.

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Questions readers ask

What's the difference between DMI and ADX?

DMI lines show direction; ADX shows strength.

Do DI crosses whipsaw?

Yes, in ranges.

Combine with ADX?

Often helps; test it.

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.