The best indicator for Vanguard S&P 500 (VOO)
We backtested 20 indicators across daily, weekly and hourly charts on real Vanguard S&P 500 (VOO) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
Donchian Midline
On the weekly chart, this is the strongest risk-adjusted edge we found for Vanguard S&P 500 (VOO) over ~15.8 years — trailing buy-and-hold by 4.6% 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 | Donchian Midline ✓ | Weekly | 10.1% | 0.88 | -21.5% | 65.5% | 29 | -4.6% |
| 2 | Donchian Breakout ✓ | Daily | 7.2% | 0.81 | -9.3% | 54.9% | 71 | -7.7% |
| 3 | Rate of Change ✓ | Daily | 7.7% | 0.79 | -23.7% | 49.1% | 228 | -7.2% |
| 4 | EMA 20/50 Cross ✓ | Daily | 8.6% | 0.78 | -26.2% | 65.5% | 29 | -6.3% |
| 5 | RSI Trend (>50) ✓ | Weekly | 8.7% | 0.78 | -18.9% | 63.6% | 33 | -6.1% |
| 6 | Rate of Change ✓ | Weekly | 7.8% | 0.74 | -19.1% | 61.0% | 41 | -7.0% |
| 7 | Donchian Breakout ✓ | Weekly | 7.7% | 0.78 | -14.3% | 78.6% | 14 | -7.1% |
| 8 | MACD ✓ | Daily | 5.4% | 0.59 | -16.0% | 45.8% | 168 | -9.5% |
| 9 | Money Flow Index ✓ | Daily | 6.0% | 0.53 | -28.6% | 86.7% | 15 | -8.9% |
| 10 | Williams %R ✓ | Weekly | 4.9% | 0.52 | -22.6% | 88.2% | 17 | -9.9% |
| 11 | EMA-10 Trend ✓ | Weekly | 5.2% | 0.52 | -25.7% | 65.7% | 67 | -9.5% |
| 12 | RSI Trend (>50) ✓ | Daily | 4.6% | 0.49 | -22.3% | 43.1% | 209 | -10.3% |
| 13 | WaveTrend (8/6/4) ✓ | Daily | 5.5% | 0.49 | -30.8% | 79.2% | 53 | -9.3% |
| 14 | Heikin-Ashi Trend ✓ | Weekly | 4.8% | 0.49 | -18.1% | 60.7% | 145 | -9.9% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For Vanguard S&P 500 (VOO), Donchian Midline 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.
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