The best indicator for Materials (XLB)
We backtested 20 indicators across daily, weekly and hourly charts on real Materials (XLB) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
Stochastic
On the daily chart, this is the strongest risk-adjusted edge we found for Materials (XLB) over ~27.4 years — trailing buy-and-hold by 3.4% 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 | Stochastic ✓ | Daily | 4.9% | 0.38 | -46.0% | 75.3% | 146 | -3.4% |
| 2 | CCI ✓ | Daily | 5.1% | 0.38 | -50.6% | 77.9% | 140 | -3.2% |
| 3 | Money Flow Index ✓ | Daily | 5.2% | 0.37 | -59.8% | 80.6% | 31 | -3.1% |
| 4 | Williams %R ✓ | Daily | 4.4% | 0.35 | -48.7% | 73.2% | 190 | -3.9% |
| 5 | Stochastic ✓ | Weekly | 4.0% | 0.34 | -52.9% | 69.2% | 26 | -4.1% |
| 6 | Donchian Midline ✓ | Weekly | 4.0% | 0.34 | -33.9% | 42.7% | 75 | -4.1% |
| 7 | EMA-10 Trend ✓ | Weekly | 3.8% | 0.32 | -34.5% | 43.3% | 134 | -4.3% |
| 8 | SMA 50/200 Cross ✓ | Daily | 3.8% | 0.31 | -35.6% | 43.5% | 23 | -4.5% |
| 9 | Holy Grail Confluence ✓ | Daily | 3.7% | 0.31 | -56.1% | 80.0% | 45 | -4.6% |
| 10 | EMA 50/200 Cross ✓ | Daily | 3.6% | 0.3 | -40.9% | 47.4% | 19 | -4.7% |
| 11 | Bollinger Mean-Reversion ✓ | Daily | 3.4% | 0.3 | -36.5% | 74.2% | 128 | -4.9% |
| 12 | RSI Trend (>50) ✓ | Weekly | 3.4% | 0.3 | -34.9% | 40.2% | 82 | -4.7% |
| 13 | Williams %R ✓ | Weekly | 3.4% | 0.29 | -52.9% | 75.8% | 33 | -4.7% |
| 14 | WaveTrend (8/6/4) ✓ | Daily | 3.5% | 0.28 | -52.1% | 77.5% | 102 | -4.8% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For Materials (XLB), Stochastic 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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