The best indicator for USD/JPY
We backtested 20 indicators across daily, weekly and hourly charts on real USD/JPY history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
MACD
On the weekly chart, this is the strongest risk-adjusted edge we found for USD/JPY over ~29.7 years — beating buy-and-hold by 1.3% 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 | MACD ✓ | Weekly | 2.5% | 0.38 | -21.4% | 38.5% | 52 | 1.3% |
| 2 | EMA 50/200 Cross ✓ | Daily | 1.3% | 0.22 | -24.5% | 30.0% | 20 | 0.2% |
| 3 | Bollinger Breakout ✓ | Weekly | 0.9% | 0.19 | -24.6% | 40.0% | 25 | -0.3% |
| 4 | Rate of Change ✓ | Weekly | 1.0% | 0.17 | -36.9% | 44.6% | 101 | -0.2% |
| 5 | EMA 20/50 Cross ✓ | Weekly | 1.1% | 0.18 | -26.7% | 42.9% | 14 | -0.1% |
| 6 | EMA 20/50 Cross ✓ | Daily | 0.9% | 0.15 | -41.5% | 27.8% | 72 | -0.3% |
| 7 | RSI Mean-Reversion | Weekly | 1.0% | 0.24 | -10.6% | 100.0% | 9 | -0.2% |
| 8 | ADX / DMI ✓ | Daily | 0.7% | 0.14 | -51.7% | 31.3% | 198 | -0.4% |
| 9 | Donchian Midline ✓ | Weekly | 0.8% | 0.14 | -38.6% | 35.8% | 81 | -0.4% |
| 10 | Bollinger Mean-Reversion ✓ | Weekly | 0.6% | 0.13 | -18.1% | 53.8% | 26 | -0.6% |
| 11 | Donchian Breakout ✓ | Weekly | 0.6% | 0.12 | -38.6% | 34.8% | 23 | -0.6% |
| 12 | Stochastic ✓ | Daily | 0.5% | 0.11 | -19.2% | 64.4% | 149 | -0.6% |
| 13 | WaveTrend (8/6/4) ✓ | Daily | 0.5% | 0.1 | -35.2% | 63.2% | 114 | -0.6% |
| 14 | WaveTrend (8/6/4) ✓ | Weekly | 0.3% | 0.08 | -28.7% | 47.6% | 21 | -0.9% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For USD/JPY, MACD 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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