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Finaxion Research · USD/JPY

Which strategy works on USD/JPY?

On USD/JPY, 3 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.

Findings

On USD/JPY, 3 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample. The best is "Sell in May and go away": +1.3 points a year over buying and holding USD/JPY. The worst is Heikin Ashi: follow the coloured candles: -1.9 points a year against buy-and-hold.

  1. On USD/JPY, 3 of 17 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”: +1.3 points a year over buying and holding USD/JPY.
  3. The worst is Heikin Ashi: follow the coloured candles: -1.9 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
“Sell in May and go away”103.4%40.2%+1.3%-7.8%60
The Turtles: 55-day breakout89.5%40.2%+1.0%-8.1%overfit84
Supertrend: the line that changes colour45.6%40.2%+0.1%-8.9%overfit20
Parabolic SAR: follow the dots22.0%40.2%-0.5%-9.6%overfit675
2-day RSI (the Connors rule)19.4%40.2%-0.5%-9.6%overfit718
RSI 14: buy oversold (30/70)10.7%40.2%-0.8%-9.9%overfit57
Upper Bollinger band breakout9.9%40.2%-0.8%-9.9%overfit476
Ichimoku: buy above the cloud8.9%40.2%-0.9%-9.9%overfit440
The golden cross (50/200)4.4%40.2%-1.0%-10.1%overfit43
Only invest above the 200-day average1.1%40.2%-1.1%-10.2%overfit275
Stochastic: oversold cross (14, 3)0.4%40.2%-1.1%-10.2%overfit400
ADX: trade only in strong trends-2.1%40.2%-1.2%-10.3%overfit966
Kaufman’s adaptive moving average (KAMA)-3.0%40.2%-1.2%-10.3%overfit1119
The MACD cross (12/26/9)-7.2%40.2%-1.4%-10.5%overfit645
Bounce off the lower Bollinger band-14.8%40.2%-1.7%-10.8%overfit238
ICT / Smart Money: the fair value gap-16.9%40.2%-1.8%-10.8%overfit224
Heikin Ashi: follow the coloured candles-20.6%40.2%-1.9%-11.0%overfit2037

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