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Finaxion Research · IWM

Which strategy works on IWM?

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

Findings

On IWM, 0 of 20 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample. The best is Supertrend: the line that changes colour: -2.3 points a year over buying and holding IWM. The worst is Heikin Ashi: follow the coloured candles: -15.3 points a year against buy-and-hold.

  1. On IWM, 0 of 20 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.
  2. The best is Supertrend: the line that changes colour: -2.3 points a year over buying and holding IWM.
  3. The worst is Heikin Ashi: follow the coloured candles: -15.3 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
Supertrend: the line that changes colour417.1%801.9%-2.3%-2.2%overfit21
“Sell in May and go away”338.2%801.9%-2.9%-2.9%overfit52
2-day RSI (the Connors rule)194.3%801.9%-4.5%-4.5%overfit614
Stochastic: oversold cross (14, 3)180.6%801.9%-4.7%-4.6%overfit365
Only invest above the 200-day average151.6%801.9%-5.2%-5.1%overfit233
RSI 14: buy oversold (30/70)146.3%801.9%-5.2%-5.2%overfit40
The MACD cross (12/26/9)117.5%801.9%-5.7%-5.7%overfit540
Ichimoku: buy above the cloud92.5%801.9%-6.2%-6.1%overfit349
The golden cross (50/200)74.0%801.9%-6.6%-6.5%overfit37
Parabolic SAR: follow the dots65.5%801.9%-6.8%-6.7%overfit652
The Turtles: 55-day breakout21.7%801.9%-8.0%-7.9%overfit129
Smart Money: the liquidity sweep-2.5%801.9%-8.8%-8.8%overfit110
ICT / Smart Money: the order block-3.7%801.9%-8.9%-8.8%overfit18
Bounce off the lower Bollinger band-3.9%801.9%-8.9%-8.8%overfit218
ICT / Smart Money: the fair value gap-11.6%801.9%-9.2%-9.1%overfit214
Upper Bollinger band breakout-23.8%801.9%-9.8%-9.7%overfit352
ADX: trade only in strong trends-29.8%801.9%-10.1%-10.0%overfit954
Wyckoff: buying the accumulation-42.1%801.9%-10.8%-10.7%overfit145
Kaufman’s adaptive moving average (KAMA)-76.7%801.9%-14.1%-14.1%overfit1054
Heikin Ashi: follow the coloured candles-83.0%801.9%-15.3%-15.2%overfit1790

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