The best indicator for Dow Jones (DIA)
We backtested 20 indicators across daily, weekly and hourly charts on real Dow Jones (DIA) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
Donchian Midline
On the weekly chart, this is the strongest risk-adjusted edge we found for Dow Jones (DIA) over ~28.5 years — trailing buy-and-hold by 4.3% CAGR.
The winner on each chart
Every indicator, ranked
Ranked by Sharpe (risk-adjusted return). Hypothetical, fees included.
| # | Indicator | TF | CAGR | Sharpe | Max DD | Win | Trades | vs B&H |
|---|---|---|---|---|---|---|---|---|
| 1 | Donchian Midline ✓ | Weekly | 4.8% | 0.47 | -34.7% | 45.5% | 77 | -4.3% |
| 2 | SMA 50/200 Cross ✓ | Daily | 5.2% | 0.46 | -41.2% | 63.2% | 19 | -3.8% |
| 3 | EMA 20/50 Cross ✓ | Daily | 4.6% | 0.46 | -34.7% | 44.1% | 68 | -4.5% |
| 4 | WaveTrend (8/6/4) ✓ | Weekly | 4.2% | 0.44 | -43.5% | 85.0% | 20 | -4.9% |
| 5 | EMA 50/200 Cross ✓ | 1-Hour | 10.6% | 1.13 | -6.9% | 50.0% | 10 | -4.4% |
| 6 | EMA 50/200 Cross ✓ | Daily | 4.7% | 0.42 | -42.9% | 50.0% | 16 | -4.3% |
| 7 | SMA 50/200 Cross ✓ | 1-Hour | 8.8% | 0.96 | -8.1% | 54.5% | 11 | -6.2% |
| 8 | RSI Mean-Reversion ✓ | 1-Hour | 4.9% | 0.7 | -9.2% | 69.7% | 33 | -10.1% |
| 9 | ADX / DMI ✓ | Weekly | 2.8% | 0.4 | -21.2% | 53.7% | 41 | -6.3% |
| 10 | WaveTrend (8/6/4) ✓ | Daily | 4.3% | 0.37 | -38.9% | 69.0% | 100 | -4.8% |
| 11 | EMA 20/50 Cross ✓ | 1-Hour | 5.2% | 0.63 | -8.9% | 39.6% | 48 | -9.8% |
| 12 | RSI Mean-Reversion ✓ | Daily | 3.3% | 0.35 | -31.1% | 89.7% | 39 | -5.8% |
| 13 | Money Flow Index ✓ | Daily | 3.9% | 0.35 | -44.3% | 84.6% | 26 | -5.2% |
| 14 | CCI ✓ | Weekly | 3.2% | 0.35 | -43.9% | 81.5% | 27 | -5.9% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For Dow Jones (DIA), Donchian Midline on the weekly timeframe gave the best balance of return and risk in our test. It still trailed buy-and-hold on raw return — but remember: this is a hypothetical backtest of a standard rule, not a recommendation. Markets change. See the methodology and disclaimer.
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