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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 MTD?

Stochastic: oversold cross (14, 3) does not beat buy-and-hold on MTD: -9.6 points a year over 29 years.

Total return
694.6%
Buy and hold
×94
CAGR
7.5%
Sharpe
0.26
Max drawdown
-44.0%
Trades
411
Out of sample
overfit
Years
29
1×10×100×114×1998200120042007201020132016201920222025
StrategyMTD

Findings

  1. Stochastic: oversold cross (14, 3) does not beat buy-and-hold on MTD: -9.6 points a year over 29 years.
  2. Against the S&P 500 over the same window: -2.0 points a year.
  3. Total return +694.6% versus ×94 for buy-and-hold, with 411 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -44.0%.
  6. It beats in neither half of the history (split at 2012).
  7. It ranks #41 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 MTD 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 MTD → · Full page for Stochastic: oversold cross (14, 3) →

How to cite

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

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