Skip to main content
Track Average Directional Index
52 / 56
Search the archiveLibrary
Library

2018issue C017

Constructing an ADX filter for intraday breakouts

An intraday breakout entry can be built so that average directional index strength decides whether a new-high move is treated as a candidate trade. The procedure locks the chart window, the prior-session ADX high, the opening interval, and a numeric threshold before a price pattern may fire.

  • An intraday breakout entry can use average directional index strength as the filter for whether a new-high move is treated as a candidate trade.
  • The procedure uses a two-day window of five-minute candlesticks and watches the first 20 minutes after the cash-session open for an ADX new high.
  • Gap continuations and two-day-high breakouts are the paired price patterns, with a preexisting uptrend sitting alongside an ADX new-high.
  • An ADX signal-line move above the prior day's ADX high marks rising volatility, and an ADX reading above 40 at the open is the stated entry trigger in the worked sequence.
Entries in this reading3 entries
Breakout system48 readingsCurrent trackAverage Directional Index71 readingsRule-based entry174 readings

Average directional index as a breakout filter

An intraday breakout entry can be constructed so that average directional index strength is the filter for whether a new-high move is treated as a candidate trade. Average directional index is a Wilder-style trend-strength reading built from directional movement. It is used here as a volatility-breakout filter, not as a standalone price forecast.

The breakout system is a single procedure that treats a new high in price together with a concurrent new high in ADX as the testable intraday event.

Chart interval, opening window, and threshold

The chart specification for the procedure is a two-day window of five-minute candlesticks. The first 20 minutes after the cash-session open is the stated interval for watching an ADX new high. A rule-based entry is a checklist of chart interval, lookback, opening window, and ADX threshold applied the same way on each session.

The ADX signal line is watched for a breakout above the prior session high, especially once it clears a stated numeric level at the open. An ADX signal-line move above the prior day's ADX high is treated as a marker of rising volatility in the underlying price. An ADX reading breaking above 40 at the open is the stated entry trigger in the worked sequence.

Paired price patterns and the uptrend precondition

Gap continuations and two-day-high breakouts are the two price-action patterns paired with the ADX filter. A two-day-high breakout is a price setup in which the session exceeds the high of the prior two days and is then filtered by the ADX rule. A gap continuation is a price setup in which an opening gap is followed in the gap direction and is then filtered by the ADX rule.

A preexisting uptrend is specified as a precondition that sits alongside an ADX new-high when locating volatile breakouts.

Directional-movement crosses are set aside

When ADX and directional-movement lines oscillate or cross, the construction directs attention to a strong-trending ADX signal rather than those crossovers. Directional-movement lines are plus and minus directional indicators that may cross or oscillate. The construction sets those crosses aside and keeps the strong-trending ADX signal.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
52 of 56 in the Average Directional Index track
201848-49 pp.Next on Average Directional IndexAn ADX volatility gate for prior-day breakoutsLimit the scan to names priced between $20 and $70 whose 14-period average directional index stayed below 40 while rising into the prior close, then require a rising cross through 40.
All readings on this track · 56 readings
  1. 1986Cycle-aligned directional trend indicator
  2. 1987What crossover and directional entry rules actually compare
  3. 1988A directional-line cross needs a trend filter, an extreme-point rule, and a dollar stop
  4. 1988Constructing true range by offset addressing
  5. 1988Constructing directional movement from bar range
  6. 1988Average directional index construction: recursive smoothing and lookback offset
  7. 1988Staged Average Directional Index construction with Relative Strength Index confirmation and stop alerts
  8. 1988Average Directional Index construction with frozen true range and directional rules
  9. 1991Constructing the average directional index from range expansion and true range
  10. 1991Constructing five-session forecasts from stochastic, ADX, and MACD inputs
  11. 1993Constructing the average directional index from directional movement and true range
  12. 1993Confirming n-bar breakouts with ADX and DX filters
  13. 1994Constructing a Bollinger band-width trend filter
  14. 1994A pre-trade checklist that can refuse a long three ways
  15. 1997An ADX threshold and a moving average as a trend filter
  16. 1998Regime filters for mutated indicators
  17. 1999Building the average directional index from range extension and true range
  18. 2000Evaluating ADX, RSI, and moving averages in a multi-stock warehouse
  19. 2000Stochastic pop as a filtered continuation setup
  20. 2000Onset and exit from one average directional index
  21. 2002Joint ADX and MACD readout for trend strength and direction
  22. 2003Adaptive Donchian breakout with implied volatility and volume
  23. 2004The average directional index as a regime gate for the relative strength index and the stochastic oscillator
  24. 2004Constructing true-range-specified volume as a directional filter
  25. 2005Constructing a multi-filter penny stock breakout procedure
  26. 2005Construct one playbook that flips with session regime
  27. 2005Combining Bollinger Bands, the average directional index, and Fibonacci retracement on currency pairs
  28. 2006Assembling an adaptive price zone from double-smoothed averages
  29. 2006An ADX strength gate for MACD and the stochastic oscillator
  30. 2007Directional movement as a filter plus trigger
  31. 2007Constructing a veto-first trend permission stack
  32. 2007ADX gates for trend end, range, and reversal
  33. 2008Constructing a nine-cell directional-ratio grid
  34. 2008Average directional index and directional trend indicator lookbacks as trend-filter parameters
  35. 2008A holding-matched market lens from averages and directional-line crosses
  36. 2008A nine-cell directional scoreboard for multi-horizon entries
  37. 2010Building a Vortex Indicator from high-low distances
  38. 2010Constructing ADX, RSI, and MACD price filters
  39. 2011Constructing a volume zone oscillator with a moving-average and Average Directional Index regime filter
  40. 2011A volume zone oscillator conditioned by an Average Directional Index filter
  41. 2011Candlestick names need volume-price, ADX, and moving-average checks
  42. 2012Clustered average-directional-index traces as a trend-start filter
  43. 2012Average Directional Index cluster filters for trend-start signals
  44. 2012Confirming a trend start or turn with a triple ADX cluster
  45. 2013Constructing a late-entry stack from a signed DMI oscillator
  46. 2013A directional oscillator and its stochastic as a stacked timing filter
  47. 2013ADX cluster lookbacks are a locked specification, not a chart label
  48. 2013Combining moving averages, stochastics, and ADX in a daily scan
  49. 2015Assembling the Average Directional Index from directional movement
  50. 2016How an Average Directional Index filter and a breakout entry form one procedure
  51. 2016Score RSI and stochastic crossings only when ADX confirms the trend
  52. 2018Constructing an ADX filter for intraday breakouts
  53. 2018An ADX volatility gate for prior-day breakouts
  54. 2019Exponential deviation bands with a moving average, RSI and ADX
  55. 2020A normalized-slope trend filter from linear regression
  56. 2020Gating volatility-momentum divergences with a Trend filter
By fieldIndicators and filters682 readingsBy year201898 readings
All 71 readings tagged Average Directional Index
Also on Average Directional Index5 readings
1993Confirming n-bar breakouts with ADX and DX filtersBreakout system2005Constructing a multi-filter penny stock breakout procedureBreakout system2016How an Average Directional Index filter and a breakout entry form one procedureBreakout system2018An ADX volatility gate for prior-day breakoutsBreakout system1988Early entry as the session switch for an opening-range breakoutBreakout system