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Finaxion Research · NZD/USD

Which strategy works on NZD/USD?

On NZD/USD, 9 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.

Findings

On NZD/USD, 9 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample. The best is RSI 14: buy oversold (30/70): +1.8 points a year over buying and holding NZD/USD. The worst is Heikin Ashi: follow the coloured candles: -1.4 points a year against buy-and-hold.

  1. On NZD/USD, 9 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.
  2. The best is RSI 14: buy oversold (30/70): +1.8 points a year over buying and holding NZD/USD.
  3. The worst is Heikin Ashi: follow the coloured candles: -1.4 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
RSI 14: buy oversold (30/70)38.7%-8.1%+1.8%-9.6%overfit45
“Sell in May and go away”26.1%-8.1%+1.4%-10.0%45
ADX: trade only in strong trends13.9%-8.1%+0.9%-10.5%overfit756
Kaufman’s adaptive moving average (KAMA)6.8%-8.1%+0.7%-10.7%overfit853
ICT / Smart Money: the fair value gap1.7%-8.1%+0.4%-11.0%overfit188
Parabolic SAR: follow the dots-2.0%-8.1%+0.3%-11.1%overfit527
Stochastic: oversold cross (14, 3)-5.3%-8.1%+0.1%-11.3%overfit338
Upper Bollinger band breakout-6.3%-8.1%+0.1%-11.3%overfit346
2-day RSI (the Connors rule)-7.5%-8.1%+0.0%-11.4%overfit568
The golden cross (50/200)-9.9%-8.1%-0.1%-11.5%overfit40
Ichimoku: buy above the cloud-9.9%-8.1%-0.1%-11.5%overfit297
Bounce off the lower Bollinger band-10.2%-8.1%-0.1%-11.5%overfit196
The MACD cross (12/26/9)-11.4%-8.1%-0.2%-11.6%overfit471
Only invest above the 200-day average-25.0%-8.1%-0.9%-12.3%overfit229
Supertrend: the line that changes colour-25.9%-8.1%-0.9%-12.3%overfit29
The Turtles: 55-day breakout-30.4%-8.1%-1.2%-12.6%overfit74
Heikin Ashi: follow the coloured candles-33.7%-8.1%-1.4%-12.8%overfit1618

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