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Finaxion Research · Stochastic: oversold cross (14, 3) · single stocks · Recomputed 2026-09-10

Does Stochastic: oversold cross (14, 3) work on FDS?

Stochastic: oversold cross (14, 3) does not beat buy-and-hold on FDS: -10.2 points a year over 30 years.

Total return
476.2%
Buy and hold
×92
CAGR
6.0%
Sharpe
0.19
Max drawdown
-55.0%
Trades
414
Out of sample
partly
Years
30
1×10×100×140×1997200020032006200920122015201820212024
StrategyFDS

Findings

  1. Stochastic: oversold cross (14, 3) does not beat buy-and-hold on FDS: -10.2 points a year over 30 years.
  2. Against the S&P 500 over the same window: -4.3 points a year.
  3. Total return +476.2% versus ×92 for buy-and-hold, with 414 trades.
  4. The result holds only partly out of sample.
  5. Maximum drawdown -55.0%.
  6. It beats in neither half of the history (split at 2011).
  7. It ranks #72 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 f4bff284709b.

Exactly what was tested

%K(14) crosses above %D(3) in the oversold zone → entry. Held until %K exceeds 80 → exit.

How to read it

The verdict compares the strategy with buying and holding FDS 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 FDS → · Full page for Stochastic: oversold cross (14, 3) →

How to cite

Finaxion Research (2026). Does Stochastic: oversold cross (14, 3) work on FDS?. Daily backtest 1962-01-01–2026-08-31, artifact f4bff284709b. https://finaxion.app/en/research/stochastic-oscillator/fds

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