ADX-gated MACD and Supertrend
Trend indicators work well in trends and poorly in ranges. This daily NIFTY futures strategy uses ADX, a measure of trend strength, as an on-off switch for two separate signals. A MACD signal-line cross and a Supertrend(10, 3) flip each trade their own lot, but only when ADX(14) is above 25. As soon as ADX closes below 25, everything is closed at the next open.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
With three trades, the evidence cannot separate good conditions from bad. All three won. The two trades held while NIFTY rose more than 1% made ₹1,29,688 together, and the one held while NIFTY stayed within 1% made ₹3,627. This fits the design: the ADX gate keeps the system out of the market unless a strong trend is already under way, and the exit fires as soon as that trend strength fades, so the few trades it takes are concentrated in powerful moves. The cost of that selectivity is that most of the year passed without a position.
About this strategy
- Use daily bars of the near-month NIFTY future to compute ADX(14), MACD(12, 26, 9) and Supertrend(10, 3).
- MACD book: when the MACD line crosses above its signal line on a day ADX is above 25, buy one lot at the next open; a cross below goes short one lot.
- Supertrend book: when Supertrend flips up on a day ADX is above 25, buy a separate lot at the next open; a flip down goes short.
- Signals on days when ADX is 25 or lower are ignored. Signals on the first session after a futures expiry are ignored too, since the roll jump can fake them.
- When ADX closes below 25, close both books at the next session's first tick. An opposite signal with ADX above 25 reverses that book.
- On the monthly futures expiry, open books are closed at 15:15 and reopened in the next month at the next open.
Why traders use it
MACD and Supertrend are two of the most widely used trend tools, but both produce many false signals in sideways markets. ADX measures whether a trend is strong regardless of its direction, so requiring it above 25 is meant to keep the signals for trending periods only. Closing everything when ADX fades means the strategy steps aside as soon as the trend weakens, instead of waiting for the opposite signal. Two independent books let the faster and slower signal each contribute.
The year in plain words
On NIFTY futures from 1 Oct 2025 to 30 Sep 2026 with default settings, the ADX gate kept the strategy out of the market for most of the year: it took only three trades, in February and April 2026, and all three won. It made ₹1,33,315 before costs and ₹1,32,298 after ₹20 per order and bid-ask slippage. One trade alone made ₹99,463, and April contributed ₹1,29,688. All three exits were triggered by ADX falling below 25, and the median hold was 11 days. Three trades are far too few to judge, and the result rests almost entirely on one strong April trend.
What the settings do
Risks
- Only three trades in a year means the result depends on one or two trends and cannot be relied on.
- With two books, the position can reach two futures lots in the same direction, doubling exposure.
- Positions are held for days, and overnight gaps can move a full lot sharply before the next-open exit.
- ADX lags, so the exit can come well after a trend has already reversed.
Who it suits
Patient positional traders who are content to stay flat for months and act only in strong trends, with margin for up to two NIFTY futures lots. It is suited to those testing trend filters rather than trading frequently.
Questions traders ask
How is ADX used to filter MACD and Supertrend?
ADX measures trend strength from 0 to 100 without regard to direction. Here, MACD and Supertrend signals are taken only when daily ADX is above 25, which is read as a trending market. When ADX closes below 25, all positions are closed at the next open.
Is the MACD Supertrend ADX strategy profitable?
In this backtest on NIFTY futures from 1 Oct 2025 to 30 Sep 2026 it made ₹1,33,315 before costs and ₹1,32,298 after ₹20 per order and bid-ask slippage, from three winning trades. Statutory charges were excluded. Three trades are too few to judge, and past results do not guarantee future ones.
Why did it trade only three times?
Daily ADX on NIFTY spends much of its time below 25, and a signal also had to occur while it was above that level. Most MACD crosses and Supertrend flips in the year happened during weaker trends and were ignored by the filter.
Can it be used on stocks?
Yes. Setting the symbol to an F&O stock trades that stock's near-month future on the server. Stock futures have different lot sizes and volatility, so the number of trades and the results will differ from NIFTY.