The best indicator for Microsoft (MSFT)
We backtested 20 indicators across daily, weekly and hourly charts on real Microsoft (MSFT) 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 Microsoft (MSFT) over ~40.4 years — trailing buy-and-hold by 8.3% 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 | ADX / DMI ✓ | Weekly | 16.2% | 0.81 | -40.7% | 51.0% | 49 | -8.3% |
| 2 | EMA 50/200 Cross ✓ | Daily | 18.6% | 0.76 | -70.9% | 39.1% | 23 | -6.0% |
| 3 | EMA 20/50 Cross ✓ | Weekly | 16.9% | 0.74 | -71.6% | 50.0% | 18 | -7.5% |
| 4 | Donchian Breakout ✓ | Daily | 13.8% | 0.73 | -32.3% | 48.4% | 159 | -10.8% |
| 5 | RSI Trend (>50) ✓ | Weekly | 15.7% | 0.71 | -60.2% | 44.7% | 103 | -8.7% |
| 6 | SMA 50/200 Cross ✓ | Daily | 16.5% | 0.7 | -73.9% | 50.0% | 28 | -8.1% |
| 7 | Donchian Breakout ✓ | Weekly | 14.2% | 0.69 | -63.2% | 58.6% | 29 | -10.2% |
| 8 | Bollinger Breakout ✓ | Weekly | 11.5% | 0.66 | -60.7% | 57.5% | 40 | -12.9% |
| 9 | Rate of Change ✓ | Weekly | 13.2% | 0.64 | -61.4% | 45.5% | 123 | -11.2% |
| 10 | Donchian Midline ✓ | Weekly | 12.8% | 0.62 | -81.3% | 39.6% | 111 | -11.7% |
| 11 | Bollinger Breakout ✓ | Daily | 9.2% | 0.59 | -36.7% | 45.0% | 191 | -15.4% |
| 12 | Rate of Change ✓ | Daily | 11.4% | 0.59 | -51.6% | 46.4% | 636 | -13.2% |
| 13 | EMA 20/50 Cross ✓ | Daily | 11.8% | 0.57 | -78.4% | 35.0% | 100 | -12.9% |
| 14 | RSI Trend (>50) ✓ | Daily | 10.7% | 0.55 | -72.7% | 38.5% | 545 | -13.9% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For Microsoft (MSFT), ADX / DMI 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.
More stock
Get the weekly edge report
The best-performing indicator per asset, what changed this week, and the honest caveats — straight to your inbox.