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Finaxion Research · USD/MXN

Which strategy works on USD/MXN?

On USD/MXN, 2 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.

Findings

On USD/MXN, 2 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample. The best is 2-day RSI (the Connors rule): +0.3 points a year over buying and holding USD/MXN. The worst is Kaufman's adaptive moving average (KAMA): -3.6 points a year against buy-and-hold.

  1. On USD/MXN, 2 of 17 famous strategies beat buy-and-hold on daily bars; 0 of them hold out of sample.
  2. The best is 2-day RSI (the Connors rule): +0.3 points a year over buying and holding USD/MXN.
  3. The worst is Kaufman’s adaptive moving average (KAMA): -3.6 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
2-day RSI (the Connors rule)60.2%49.9%+0.3%-8.9%overfit606
Supertrend: the line that changes colour55.2%49.9%+0.2%-9.1%3
Stochastic: oversold cross (14, 3)39.4%49.9%-0.3%-9.6%overfit315
Ichimoku: buy above the cloud36.2%49.9%-0.4%-9.7%overfit292
Bounce off the lower Bollinger band32.7%49.9%-0.5%-9.8%overfit165
The MACD cross (12/26/9)13.9%49.9%-1.2%-10.5%overfit484
The Turtles: 55-day breakout5.5%49.9%-1.6%-10.8%overfit68
Upper Bollinger band breakout3.7%49.9%-1.6%-10.9%overfit374
RSI 14: buy oversold (30/70)0.5%49.9%-1.8%-11.0%overfit35
Parabolic SAR: follow the dots-1.1%49.9%-1.8%-11.1%overfit571
ADX: trade only in strong trends-4.0%49.9%-2.0%-11.2%overfit782
ICT / Smart Money: the fair value gap-6.2%49.9%-2.1%-11.3%overfit130
“Sell in May and go away”-16.8%49.9%-2.6%-11.8%overfit45
The golden cross (50/200)-17.8%49.9%-2.7%-11.9%overfit40
Only invest above the 200-day average-19.8%49.9%-2.8%-12.0%overfit252
Heikin Ashi: follow the coloured candles-20.2%49.9%-2.8%-12.0%overfit1561
Kaufman’s adaptive moving average (KAMA)-34.3%49.9%-3.6%-12.8%overfit880

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