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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 ICE?

Heikin Ashi: follow the coloured candles does not beat buy-and-hold on ICE: -18.6 points a year over 21 years.

Total return
-35.3%
Buy and hold
×24
CAGR
-2.1%
Sharpe
-0.12
Max drawdown
-77.8%
Trades
1353
Out of sample
overfit
Years
21
1×10×27×20062008201020122014201620182020202220242026
StrategyICE

Findings

  1. Heikin Ashi: follow the coloured candles does not beat buy-and-hold on ICE: -18.6 points a year over 21 years.
  2. Against the S&P 500 over the same window: -13.3 points a year.
  3. Total return -35.3% versus ×24 for buy-and-hold, with 1353 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -77.8%.
  6. It beats in neither half of the history (split at 2016).
  7. It ranks #143 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 ICE 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)

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How to cite

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

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