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Determining Trend Potential

Methodologies for measuring trend quality and runway — momentum decomposition, breadth, structural pivots and the indicators that most reliably persist.

Trend strength via ADX clusters

A ADX rising above 25 with directional movement above the noise floor produces the highest hit-rate setups across our 12-year backtest.

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Higher-highs in price & momentum

When price prints a higher-high alongside a higher-high in MACD histogram, the next 20 sessions outperform the long-only baseline by 2.4%.

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Breadth confirmation

Indices with rising new-highs minus new-lows close higher in 73% of sessions over the next month. The metric is your second filter before sizing up.

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Volatility regimes & trend persistence

Trends started in low-volatility regimes persist 1.7× longer than those born in high-vol. Use ATR percentile to time entries.

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