The best indicator for EUR/USD
We backtested 20 indicators across daily, weekly and hourly charts on real EUR/USD history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
ADX / DMI
On the weekly chart, this is the strongest risk-adjusted edge we found for EUR/USD over ~22.6 years — beating buy-and-hold by 1.0% 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 | ADX / DMI ✓ | Weekly | 0.7% | 0.15 | -21.3% | 39.1% | 23 | 1.0% |
| 2 | Donchian Breakout ✓ | Weekly | 0.6% | 0.16 | -13.7% | 64.3% | 14 | 0.9% |
| 3 | Bollinger Breakout | Weekly | 0.4% | 0.12 | -13.7% | 58.8% | 17 | 0.7% |
| 4 | WaveTrend (8/6/4) ✓ | Daily | 0.4% | 0.09 | -24.2% | 59.6% | 89 | 0.6% |
| 5 | ADX / DMI ✓ | Daily | 0.3% | 0.08 | -25.2% | 30.9% | 149 | 0.4% |
| 6 | EMA 50/200 Cross | Daily | 0.2% | 0.06 | -24.0% | 41.2% | 17 | 0.4% |
| 7 | SMA 50/200 Cross | Daily | 0.1% | 0.05 | -24.4% | 37.5% | 16 | 0.3% |
| 8 | Bollinger Mean-Reversion ✓ | Weekly | 0.1% | 0.04 | -24.2% | 47.6% | 21 | 0.3% |
| 9 | Williams %R | Daily | -0.3% | -0.01 | -32.3% | 58.0% | 162 | -0.2% |
| 10 | Stochastic | Daily | -0.3% | -0.02 | -34.1% | 58.1% | 129 | -0.1% |
| 11 | MACD | Weekly | -0.5% | -0.04 | -34.1% | 50.0% | 54 | -0.2% |
| 12 | CCI | Daily | -0.6% | -0.05 | -28.2% | 61.8% | 110 | -0.4% |
| 13 | Bollinger Mean-Reversion | Daily | -0.5% | -0.06 | -29.6% | 58.5% | 94 | -0.3% |
| 14 | RSI Trend (>50) | Weekly | -0.7% | -0.08 | -34.1% | 35.4% | 65 | -0.4% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For EUR/USD, ADX / DMI on the weekly timeframe gave the best balance of return and risk in our test. It beat buy-and-hold — 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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