The best indicator for 1-3Y Treasuries (SHY)
We backtested 20 indicators across daily, weekly and hourly charts on real 1-3Y Treasuries (SHY) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
SMA 50/200 Cross
On the daily chart, this is the strongest risk-adjusted edge we found for 1-3Y Treasuries (SHY) over ~23.8 years — trailing buy-and-hold by 0.2% 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 | SMA 50/200 Cross ✓ | Daily | 1.8% | 1.3 | -2.5% | 50.0% | 12 | -0.2% |
| 2 | EMA 20/50 Cross ✓ | Daily | 1.3% | 1.01 | -3.9% | 32.6% | 46 | -0.7% |
| 3 | RSI Trend (>50) ✓ | Weekly | 1.4% | 0.96 | -2.5% | 50.0% | 46 | -0.5% |
| 4 | Donchian Breakout ✓ | Weekly | 1.3% | 0.96 | -3.4% | 61.1% | 18 | -0.6% |
| 5 | ADX / DMI ✓ | Weekly | 1.2% | 0.95 | -2.2% | 45.8% | 24 | -0.7% |
| 6 | Bollinger Breakout ✓ | Weekly | 1.0% | 0.83 | -4.0% | 48.0% | 25 | -0.9% |
| 7 | Donchian Midline ✓ | Weekly | 1.0% | 0.71 | -5.8% | 30.8% | 65 | -0.9% |
| 8 | Rate of Change ✓ | Weekly | 1.0% | 0.67 | -6.7% | 45.9% | 74 | -1.0% |
| 9 | MACD ✓ | Weekly | 0.6% | 0.51 | -4.9% | 46.3% | 54 | -1.3% |
| 10 | Donchian Breakout ✓ | Daily | 0.5% | 0.48 | -8.5% | 35.4% | 96 | -1.4% |
| 11 | ADX / DMI ✓ | Daily | 0.4% | 0.34 | -10.4% | 20.1% | 134 | -1.6% |
| 12 | Bollinger Breakout ✓ | Daily | 0.3% | 0.24 | -9.3% | 26.7% | 116 | -1.7% |
| 13 | EMA-10 Trend ✓ | Weekly | 0.3% | 0.24 | -12.5% | 27.6% | 123 | -1.6% |
| 14 | Money Flow Index | Daily | 0.0% | 0.06 | -5.4% | 57.1% | 21 | -1.9% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For 1-3Y Treasuries (SHY), SMA 50/200 Cross on the daily 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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