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Finaxion Research · Heikin Ashi: follow the coloured candles · single stocks · Recomputed 2026-09-10

Does Heikin Ashi: follow the coloured candles work on EL?

Heikin Ashi: follow the coloured candles does not beat buy-and-hold on EL: -16.1 points a year over 31 years.

Total return
-87.5%
Buy and hold
×17
CAGR
-6.5%
Sharpe
-0.37
Max drawdown
-92.9%
Trades
2085
Out of sample
overfit
Years
31
1×10×51×19961999200220052008201120142017202020232026
StrategyEL

Findings

  1. Heikin Ashi: follow the coloured candles does not beat buy-and-hold on EL: -16.1 points a year over 31 years.
  2. Against the S&P 500 over the same window: -17.1 points a year.
  3. Total return -87.5% versus ×17 for buy-and-hold, with 2085 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -92.9%.
  6. It beats in neither half of the history (split at 2011).
  7. It ranks #198 of 235 markets for this strategy by annual excess over the S&P 500.

Findings derived from the full panel. Each carries its number and its denominator; the computations are reproducible with artifact 2aad8ceec7e6.

Exactly what was tested

Long while the Heikin Ashi candle is bullish (HA close above HA open); exit on the first bearish candle.

How to read it

The verdict compares the strategy with buying and holding EL over the same window, with round-trip costs per asset class. “Out of sample” is walk-forward: the rule is fit on one stretch and judged on the next. A result that beats in the full sample but not out of it is overfit. Full methodology in the protocol. How we test.

Open this backtest with its trades   Trades (CSV)

Every strategy on EL → · Full page for Heikin Ashi: follow the coloured candles →

How to cite

Finaxion Research (2026). Does Heikin Ashi: follow the coloured candles work on EL?. Daily backtest 1962-01-01–2026-08-31, artifact 2aad8ceec7e6. https://finaxion.app/en/research/heikin-ashi/el

Not a recommendation. Past performance does not guarantee future results.