FINAXIONResearch
Finaxion Research · Supertrend: the line that changes colour · single stocks · Recomputed 2026-09-10

Does Supertrend: the line that changes colour work on MS?

Supertrend: the line that changes colour does not beat buy-and-hold on MS: -5.5 points a year over 34 years.

Total return
×12
Buy and hold
×63
CAGR
7.7%
Sharpe
0.26
Max drawdown
-63.3%
Trades
63
Out of sample
overfit
Years
34
1×10×19941997200020032006200920122015201820212024
StrategyMS

Findings

  1. Supertrend: the line that changes colour does not beat buy-and-hold on MS: -5.5 points a year over 34 years.
  2. Against the S&P 500 over the same window: -3.2 points a year.
  3. Total return ×12 versus ×63 for buy-and-hold, with 63 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -63.3%.
  6. It beats in neither half of the history (split at 2009).
  7. It ranks #99 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 e097c9613211.

Exactly what was tested

Entry when the close exceeds the upper band (ATR 10, multiplier 3); exit when the close drops below the lower band. The classic Supertrend definition.

How to read it

The verdict compares the strategy with buying and holding MS 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 MS → · Full page for Supertrend: the line that changes colour →

How to cite

Finaxion Research (2026). Does Supertrend: the line that changes colour work on MS?. Daily backtest 1962-01-01–2026-08-31, artifact e097c9613211. https://finaxion.app/en/research/supertrend/ms

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