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Finaxion Research · EW

Which strategy works on EW?

On EW, 0 of 20 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.

Findings

On EW, 0 of 20 famous strategies beat buy-and-hold on daily bars, and 0 of them hold out of sample. The best is "Sell in May and go away" at -3.0 points a year over buying and holding EW, while the worst is the Turtles: 55-day breakout at -20.6 points a year against buy-and-hold.

  1. On EW, 0 of 20 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.
  2. The best is “Sell in May and go away”: -3.0 points a year over buying and holding EW.
  3. The worst is the Turtles: 55-day breakout: -20.6 points a year against buy-and-hold.

The 20 strategies, one by one

StrategyReturnBuy and holdExcess (pts/yr)Vs. S&P 500 (pts/yr)Out of sampleTrades
“Sell in May and go away”×34×66-3.0%+6.0%53
Stochastic: oversold cross (14, 3)×21×66-4.9%+4.1%365
RSI 14: buy oversold (30/70)×13×66-7.1%+1.9%partly48
The golden cross (50/200)993.5%×66-7.7%+1.3%overfit35
2-day RSI (the Connors rule)976.0%×66-7.7%+1.2%overfit628
Bounce off the lower Bollinger band524.2%×66-10.0%-1.0%partly204
Only invest above the 200-day average410.0%×66-10.8%-1.8%overfit195
Supertrend: the line that changes colour238.4%×66-12.4%-3.5%overfit47
Wyckoff: buying the accumulation199.4%×66-12.9%-4.0%overfit143
Parabolic SAR: follow the dots173.2%×66-13.3%-4.3%overfit586
Kaufman’s adaptive moving average (KAMA)163.5%×66-13.4%-4.5%overfit922
The MACD cross (12/26/9)150.6%×66-13.6%-4.7%overfit526
ICT / Smart Money: the order block3.7%×66-17.0%-8.1%overfit14
Smart Money: the liquidity sweep0.1%×66-17.2%-8.2%overfit68
ADX: trade only in strong trends-7.4%×66-17.5%-8.5%overfit847
Upper Bollinger band breakout-11.4%×66-17.6%-8.7%overfit452
Ichimoku: buy above the cloud-17.5%×66-17.9%-8.9%overfit379
Heikin Ashi: follow the coloured candles-32.1%×66-18.6%-9.7%overfit1742
ICT / Smart Money: the fair value gap-35.2%×66-18.8%-9.8%overfit236
The Turtles: 55-day breakout-60.0%×66-20.6%-11.6%overfit124

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