The best indicator for Min Volatility (USMV)
We backtested 20 indicators across daily, weekly and hourly charts on real Min Volatility (USMV) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
Money Flow Index
On the daily chart, this is the strongest risk-adjusted edge we found for Min Volatility (USMV) over ~14.6 years — trailing buy-and-hold by 6.9% 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 | Money Flow Index ✓ | Daily | 4.7% | 0.73 | -13.8% | 78.6% | 14 | -6.9% |
| 2 | Williams %R ✓ | Daily | 5.9% | 0.66 | -29.8% | 81.2% | 96 | -5.7% |
| 3 | RSI Trend (>50) ✓ | Weekly | 6.0% | 0.65 | -17.8% | 58.1% | 31 | -5.5% |
| 4 | WaveTrend (8/6/4) ✓ | Daily | 4.8% | 0.53 | -29.8% | 72.3% | 47 | -6.8% |
| 5 | EMA 20/50 Cross | Daily | 4.5% | 0.52 | -18.6% | 51.6% | 31 | -7.1% |
| 6 | Donchian Midline | Weekly | 4.8% | 0.52 | -24.1% | 57.5% | 40 | -6.7% |
| 7 | Donchian Breakout ✓ | Weekly | 4.4% | 0.55 | -15.4% | 71.4% | 14 | -7.0% |
| 8 | Bollinger Mean-Reversion ✓ | Daily | 4.4% | 0.51 | -29.8% | 83.6% | 61 | -7.2% |
| 9 | CCI ✓ | Weekly | 3.5% | 0.56 | -16.2% | 84.6% | 13 | -7.9% |
| 10 | Holy Grail Confluence ✓ | Daily | 4.3% | 0.48 | -29.8% | 90.0% | 20 | -7.3% |
| 11 | Stochastic ✓ | Daily | 4.0% | 0.47 | -29.8% | 77.4% | 53 | -7.6% |
| 12 | Williams %R ✓ | Weekly | 3.7% | 0.46 | -25.7% | 84.2% | 19 | -7.7% |
| 13 | Bollinger Breakout ✓ | Daily | 2.2% | 0.43 | -12.2% | 52.5% | 61 | -9.4% |
| 14 | Donchian Midline | Daily | 3.3% | 0.42 | -22.0% | 47.2% | 199 | -8.3% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For Min Volatility (USMV), Money Flow Index 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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