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Finaxion Research · FDS

Which strategy works on FDS?

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

Findings

On FDS, 0 of 20 famous strategies beat buy-and-hold on daily bars, and 0 of them hold out of sample. The best is Kaufman's adaptive moving average (KAMA): -4.9 points a year over buying and holding FDS. The worst is Upper Bollinger band breakout: -17.6 points a year against buy-and-hold.

  1. On FDS, 0 of 20 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.
  2. The best is Kaufman’s adaptive moving average (KAMA): -4.9 points a year over buying and holding FDS.
  3. The worst is Upper Bollinger band breakout: -17.6 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
Kaufman’s adaptive moving average (KAMA)×25×92-4.9%+0.9%overfit999
Heikin Ashi: follow the coloured candles×22×92-5.4%+0.5%overfit1895
“Sell in May and go away”838.8%×92-8.5%-2.6%overfit60
ADX: trade only in strong trends814.7%×92-8.5%-2.6%overfit965
Supertrend: the line that changes colour752.8%×92-8.8%-2.9%overfit67
Wyckoff: buying the accumulation659.1%×92-9.2%-3.3%overfit210
Ichimoku: buy above the cloud606.1%×92-9.5%-3.6%overfit391
Stochastic: oversold cross (14, 3)476.2%×92-10.2%-4.3%partly414
RSI 14: buy oversold (30/70)460.3%×92-10.3%-4.4%overfit60
The MACD cross (12/26/9)416.1%×92-10.6%-4.7%overfit581
Only invest above the 200-day average309.4%×92-11.4%-5.5%overfit259
The golden cross (50/200)157.8%×92-13.0%-7.1%overfit53
The Turtles: 55-day breakout155.3%×92-13.0%-7.1%overfit133
Parabolic SAR: follow the dots143.4%×92-13.2%-7.3%overfit678
Bounce off the lower Bollinger band100.2%×92-13.8%-8.0%overfit246
ICT / Smart Money: the fair value gap9.3%×92-15.9%-10.0%overfit210
2-day RSI (the Connors rule)-0.7%×92-16.2%-10.3%overfit704
ICT / Smart Money: the order block-2.2%×92-16.2%-10.3%6
Smart Money: the liquidity sweep-8.6%×92-16.5%-10.6%overfit88
Upper Bollinger band breakout-34.5%×92-17.6%-11.7%overfit510

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