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Finaxion Research · SPY

Which strategy works on SPY?

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

Findings

On SPY, 0 of 20 famous strategies beat buy-and-hold on daily bars, and 0 of them hold out of sample. The best is the golden cross (50/200): -1.4 points a year over buying and holding SPY, while the worst is Heikin Ashi: follow the coloured candles: -14.9 points a year against buy-and-hold.

  1. On SPY, 0 of 20 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.
  2. The best is the golden cross (50/200): -1.4 points a year over buying and holding SPY.
  3. The worst is Heikin Ashi: follow the coloured candles: -14.9 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
The golden cross (50/200)×21×32-1.4%-1.4%partly31
Only invest above the 200-day average×11×32-3.3%-3.3%overfit215
“Sell in May and go away”739.7%×32-4.3%-4.3%overfit67
Supertrend: the line that changes colour590.9%×32-4.9%-4.9%overfit27
RSI 14: buy oversold (30/70)350.0%×32-6.3%-6.3%overfit56
Ichimoku: buy above the cloud303.6%×32-6.6%-6.6%overfit435
2-day RSI (the Connors rule)240.2%×32-7.1%-7.1%partly764
Stochastic: oversold cross (14, 3)176.6%×32-7.8%-7.8%overfit423
Wyckoff: buying the accumulation167.7%×32-7.9%-7.9%overfit178
The MACD cross (12/26/9)108.9%×32-8.6%-8.6%overfit714
The Turtles: 55-day breakout101.5%×32-8.7%-8.7%overfit163
Bounce off the lower Bollinger band101.0%×32-8.7%-8.8%overfit294
ADX: trade only in strong trends30.4%×32-10.1%-10.1%overfit1089
Parabolic SAR: follow the dots17.1%×32-10.4%-10.4%overfit829
ICT / Smart Money: the order block3.0%×32-10.8%-10.8%overfit34
Smart Money: the liquidity sweep-17.8%×32-11.4%-11.4%overfit116
ICT / Smart Money: the fair value gap-21.8%×32-11.6%-11.6%overfit296
Upper Bollinger band breakout-31.7%×32-12.0%-12.0%overfit462
Kaufman’s adaptive moving average (KAMA)-45.4%×32-12.6%-12.6%overfit1281
Heikin Ashi: follow the coloured candles-74.8%×32-14.9%-14.9%overfit2173

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