The best indicator for USD/MXN
We backtested 20 indicators across daily, weekly and hourly charts on real USD/MXN history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
RSI Mean-Reversion
On the daily chart, this is the strongest risk-adjusted edge we found for USD/MXN over ~23.3 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 | RSI Mean-Reversion ✓ | Daily | 1.7% | 0.43 | -9.1% | 68.6% | 35 | -0.2% |
| 2 | Stochastic ✓ | Daily | 2.4% | 0.37 | -18.3% | 55.4% | 130 | 0.5% |
| 3 | MACD ✓ | Weekly | 1.7% | 0.23 | -25.4% | 34.8% | 46 | -0.3% |
| 4 | WaveTrend (8/6/4) | Weekly | 1.5% | 0.23 | -28.7% | 64.7% | 17 | -0.5% |
| 5 | Donchian Breakout | Weekly | 1.4% | 0.2 | -31.9% | 40.0% | 15 | -0.6% |
| 6 | Williams %R ✓ | Daily | 1.0% | 0.17 | -20.9% | 58.3% | 144 | -0.9% |
| 7 | EMA 20/50 Cross | Daily | 0.9% | 0.14 | -29.0% | 27.8% | 54 | -1.0% |
| 8 | ADX / DMI ✓ | Daily | 0.8% | 0.14 | -26.3% | 25.9% | 139 | -1.0% |
| 9 | Rate of Change | Weekly | 0.9% | 0.14 | -33.7% | 33.3% | 84 | -1.1% |
| 10 | Heikin-Ashi Trend | Weekly | 0.9% | 0.14 | -47.1% | 35.1% | 205 | -1.1% |
| 11 | Bollinger Breakout ✓ | Weekly | 0.6% | 0.11 | -35.3% | 36.4% | 22 | -1.4% |
| 12 | WaveTrend (8/6/4) ✓ | Daily | 0.5% | 0.1 | -21.5% | 63.3% | 90 | -1.4% |
| 13 | EMA 50/200 Cross | Daily | 0.3% | 0.08 | -33.3% | 18.2% | 22 | -1.6% |
| 14 | CCI | Daily | 0.2% | 0.07 | -23.4% | 59.7% | 119 | -1.7% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For USD/MXN, RSI Mean-Reversion 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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