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Finaxion Research · EUR/USD

Which strategy works on EUR/USD?

On EUR/USD, 7 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.

Findings

On EUR/USD, 7 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample. The best is Only invest above the 200-day average: +1.1 points a year over buying and holding EUR/USD. The worst is RSI 14: buy oversold (30/70): -1.7 points a year against buy-and-hold.

  1. On EUR/USD, 7 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.
  2. The best is Only invest above the 200-day average: +1.1 points a year over buying and holding EUR/USD.
  3. The worst is RSI 14: buy oversold (30/70): -1.7 points a year against buy-and-hold.

The 17 strategies, one by one

StrategyReturnBuy and holdExcess (pts/yr)Vs. S&P 500 (pts/yr)Out of sampleTrades
Only invest above the 200-day average23.2%-3.1%+1.1%-10.1%overfit135
“Sell in May and go away”17.3%-3.1%+0.8%-10.3%45
Supertrend: the line that changes colour12.6%-3.1%+0.7%-10.5%13
The golden cross (50/200)3.8%-3.1%+0.3%-10.9%overfit32
ICT / Smart Money: the fair value gap1.6%-3.1%+0.2%-11.0%overfit197
2-day RSI (the Connors rule)-1.6%-3.1%+0.1%-11.1%overfit554
The Turtles: 55-day breakout-2.0%-3.1%+0.1%-11.1%overfit68
Upper Bollinger band breakout-4.8%-3.1%-0.1%-11.2%overfit340
Ichimoku: buy above the cloud-7.3%-3.1%-0.2%-11.4%overfit349
ADX: trade only in strong trends-9.5%-3.1%-0.3%-11.5%overfit817
Stochastic: oversold cross (14, 3)-11.6%-3.1%-0.4%-11.6%overfit342
Heikin Ashi: follow the coloured candles-13.1%-3.1%-0.5%-11.7%overfit1588
Parabolic SAR: follow the dots-18.3%-3.1%-0.7%-11.9%overfit558
Kaufman’s adaptive moving average (KAMA)-23.8%-3.1%-1.0%-12.2%overfit875
The MACD cross (12/26/9)-25.4%-3.1%-1.1%-12.3%overfit517
Bounce off the lower Bollinger band-26.4%-3.1%-1.2%-12.4%overfit190
RSI 14: buy oversold (30/70)-34.3%-3.1%-1.7%-12.9%overfit30

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