RSI & ADX Trading Strategies (Backtest and Rules)
The RSI, ADX, (and IBS). These technical indicators are good for short-term mean-reversion or trend-following strategies. They complement each other. RSI and ADX are good for short-term reversals, and opposite, ADX is a quality indicator for trend-following strategies.
We backtest the following trading rules:
If the IBS is below 0.1, we buy QQQ at the close.
We sell at the close when the IBS is above 0.9.
The equity curve looks like the image shown below.
You can find more info about this trading strategy here:
https://www.quantifiedstrategies.com/rsi-adx-trading-strategy/