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Finaxion Research · Only invest above the 200-day average · forex pairs · Recomputed 2026-09-10

Does Only invest above the 200-day average work on USD/CAD?

Only invest above the 200-day average does not beat buy-and-hold on USD/CAD: -0.5 points a year over 23 years.

Total return
-9.1%
Buy and hold
1.7%
CAGR
-0.4%
Sharpe
-0.68
Max drawdown
-24.8%
Trades
225
Out of sample
overfit
Years
23
0.7×0.9×1×1.1×200420062008201020122014201620182020202220242026
StrategyUSD/CAD

Findings

  1. Only invest above the 200-day average does not beat buy-and-hold on USD/CAD: -0.5 points a year over 23 years.
  2. Against the S&P 500 over the same window: -11.6 points a year.
  3. Total return -9.1% versus +1.7% for buy-and-hold, with 225 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -24.8%.
  6. It beat before 2015 and stopped afterwards.
  7. It ranks #218 of 235 markets for this strategy by annual excess over the S&P 500.

Findings derived from the full panel. Each carries its number and its denominator; the computations are reproducible with artifact 7a691ad4255c.

Exactly what was tested

Long while the close is above the 200-day SMA; exit when the close crosses below it. Next-close execution.

How to read it

The verdict compares the strategy with buying and holding USD/CAD over the same window, with round-trip costs per asset class. “Out of sample” is walk-forward: the rule is fit on one stretch and judged on the next. A result that beats in the full sample but not out of it is overfit. Full methodology in the protocol. How we test.

Open this backtest with its trades   Trades (CSV)

Every strategy on USD/CAD → · Full page for Only invest above the 200-day average →

How to cite

Finaxion Research (2026). Does Only invest above the 200-day average work on USD/CAD?. Daily backtest 1962-01-01–2026-08-31, artifact 7a691ad4255c. https://finaxion.app/en/research/200-day-sma-filter/usdcad

Not a recommendation. Past performance does not guarantee future results.