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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 HLT?

Heikin Ashi: follow the coloured candles does not beat buy-and-hold on HLT: -17.9 points a year over 13 years.

Total return
-8.2%
Buy and hold
659.1%
CAGR
-0.7%
Sharpe
-0.15
Max drawdown
-42.4%
Trades
866
Out of sample
—
Years
13
1×4.5×2014201520162017201820192020202120222023202420252026
StrategyHLT

Findings

  1. Heikin Ashi: follow the coloured candles does not beat buy-and-hold on HLT: -17.9 points a year over 13 years.
  2. Against the S&P 500 over the same window: -14.8 points a year.
  3. Total return -8.2% versus +659.1% for buy-and-hold, with 866 trades.
  4. Maximum drawdown -42.4%.
  5. It beats in neither half of the history (split at 2020).
  6. It ranks #166 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 HLT 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 HLT → · Full page for Heikin Ashi: follow the coloured candles →

How to cite

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

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