The best indicator for EAFE (EFA)
We backtested 20 indicators across daily, weekly and hourly charts on real EAFE (EFA) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
RSI Trend (>50)
On the weekly chart, this is the strongest risk-adjusted edge we found for EAFE (EFA) over ~24.9 years — trailing buy-and-hold by 1.5% 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 | RSI Trend (>50) ✓ | Weekly | 5.0% | 0.47 | -29.1% | 44.1% | 59 | -1.5% |
| 2 | EMA-10 Trend ✓ | Weekly | 4.9% | 0.47 | -27.8% | 47.7% | 107 | -1.5% |
| 3 | EMA 20/50 Cross ✓ | Daily | 4.9% | 0.45 | -27.7% | 42.9% | 56 | -1.5% |
| 4 | Donchian Midline ✓ | Weekly | 5.0% | 0.45 | -26.3% | 37.7% | 61 | -1.4% |
| 5 | ADX / DMI ✓ | Weekly | 3.0% | 0.41 | -17.5% | 54.5% | 33 | -3.4% |
| 6 | EMA 50/200 Cross ✓ | Daily | 4.4% | 0.39 | -34.8% | 43.8% | 16 | -1.9% |
| 7 | Donchian Breakout ✓ | Weekly | 3.6% | 0.38 | -21.0% | 71.4% | 21 | -2.9% |
| 8 | SMA 50/200 Cross ✓ | Daily | 4.2% | 0.37 | -35.3% | 53.3% | 15 | -2.2% |
| 9 | MACD ✓ | Weekly | 3.5% | 0.35 | -32.8% | 48.1% | 54 | -3.0% |
| 10 | Stochastic ✓ | Daily | 3.8% | 0.33 | -47.1% | 72.1% | 122 | -2.6% |
| 11 | EMA 20/50 Cross ✓ | Weekly | 4.0% | 0.37 | -46.3% | 53.8% | 13 | -2.4% |
| 12 | WaveTrend (8/6/4) ✓ | Weekly | 2.8% | 0.28 | -51.9% | 70.6% | 17 | -3.6% |
| 13 | Holy Grail Confluence ✓ | Daily | 3.0% | 0.27 | -48.8% | 76.2% | 42 | -3.3% |
| 14 | Williams %R ✓ | Daily | 2.8% | 0.26 | -53.7% | 72.8% | 173 | -3.6% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For EAFE (EFA), RSI Trend (>50) 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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