Automated Trading Strategy: #2 (Updated)
MACD/ADX Crossover With HMM Filtering ($38K on 18 trades and 1 contract in 4 months)
Important: There is no guarantee that ATS strategies will have the same performance in the future. I use backtests and forward tests to compare historical strategy performance. Backtests are based on historical data, not real-time data so the results shared are hypothetical, not real. Forward tests are based on live data, however, they use a simulated account. Any success I have with live trading is untypical. Trading futures is extremely risky. You should only use risk capital to fund live futures accounts and if you do trade live, be prepared to lose your entire account. There are no guarantees that any performance you see here will continue in the future. I recommend using ATS strategies in simulated trading until you/we find the holy grail of trade strategy. This is strictly for learning purposes.
As a quick reminder, we’re on the hunt for the holy grail of automated trading strategies. If you have any questions, start with the FAQs and if you still have questions, feel free to reach out to me (Celan) directly at AutomatedTradingStrategies@protonmail.com.
Strategy 2 was originally published four years ago on January 14, 2021. For the original version, click here.
The goal of this series is to update strategies with a core set of features/filters that are used as a standard template today (when the strategy allows).
Strategy 2 Enhanced takes the original MACD/ADX crossover system introduced in Strategy 2, and adds filtering layers to improve trade selection. The core logic remains simple: enter long when MACD crosses above its signal line while ADX crosses above ADXR, and vice versa for shorts.
What makes this version “enhanced” are the configurable filters that have been learned over the past four years. For example, here’s a backtest of Strategy 2 from September 21, 2025 through January 7, 2025:
The edge is there, but not enough to justify the capital churn.
And here’s a backtest from Strategy 2 Enhanced over the same time period.
The filters drastically decrease trade count, while increasing profit factor and win rate. This is a much better trade-off for the capital outlay.
Both the original Strategy 2 and the enhanced Strategy 2 are available for download below.
So what are the added filters?
Filters Explained
We are in the process of updating all strategies with a standard template that I’ve adopted over the years. It includes the following filters:
Session
Risk Per Trade
Trailing Stop
Account Limits
Position (long/short)
Week of Month
HMM Regime - Some strategies like Strategy 2 include an HMM option that is based on forward tested data.
These filters come from years of forward testing. We already know Strategy 2 has edge, but that edge needed some refinement: