Tested strategies

We tested the strategies traders swear by.

The popular strategies, put through the same test, across 17 years of data with real trading costs. For each one: what it is, how it is used, what it claims, and our verdict in plain terms. Most showed no edge, and a few lost money outright. The verdict sits beside every title. Nothing here touches how Otto itself trades.

21 strategies tested

The results, with the verdict on each.

A verdict of “no edge” means the strategy performed no better than entering at random on the same markets over the same period, and lost after costs. Where a strategy lost with statistical significance, or could not be tested honestly, the verdict says so.

Does smart money concepts trading actually work?

Smart money concepts, often called ICT after the trader who popularised them, is a way of reading a chart built on the idea that l

No edgeRead →

Do supply and demand zones actually work?

Supply and demand trading marks the areas from which price previously moved sharply, on the theory that unfilled orders remain the

Significant loserRead →

Do candlestick patterns actually work?

Candlestick patterns are named shapes formed by one to three candles: the engulfing candle, the pin bar or hammer, the doji, the i

No edgeRead →

Do moving average crossovers actually work?

A moving average crossover buys when a faster moving average crosses above a slower one and sells when it crosses below.

No edgeRead →

Do RSI strategies actually work?

The relative strength index reads from 0 to 100, comparing recent gains to recent losses.

No edgeRead →

Do MACD strategies actually work?

MACD is the difference between two exponential moving averages, plotted with a signal line and a histogram.

No edgeRead →

Do stochastic and other oscillators actually work?

The stochastic oscillator compares the close with the recent range; the CCI measures distance from an average; Williams %R, the ul

No edgeRead →

Does support and resistance trading actually work?

Support and resistance are levels where price has previously turned, drawn by hand or found mechanically from recent highs and low

No edgeRead →

Do London open and session breakout strategies actually work?

Session breakout strategies mark the range of a quiet period, usually the Asian session, and trade a break of it when London or Ne

No edgeRead →

Does the Asian range strategy actually work?

The Asian range strategy trades the quiet hours themselves, buying at the bottom of the overnight range and selling at the top, on

No edgeRead →

Do seasonality and day-of-week effects actually work?

Calendar strategies trade patterns tied to the clock: a currency's tendency to rise in a particular month, a stock index's behavio

No edgeRead →

Do currency strength meters actually work?

A currency strength meter ranks the major currencies by their recent performance across all their pairs, and the strategy buys the

No edgeRead →

Does COT positioning actually work?

The Commitments of Traders report publishes futures positioning by category of trader each week.

No lasting edgeRead →

Does correlation and pairs trading actually work?

Pairs trading takes two instruments that usually move together, waits for them to diverge, and buys the laggard while selling the

No edgeRead →

Does scalping actually work?

Scalping trades for a few pips, dozens or hundreds of times a day, on one to fifteen minute charts.

Cost-deadRead →

Does gap trading actually work?

Gap trading acts on the jump between one session's close and the next open, usually on stock indices.

Could not testRead →

Does news trading actually work?

News trading enters around scheduled releases, either before, to catch the spike, or after, to follow the direction the market cho

Could not testRead →

Do AI and machine-learning EAs actually work?

AI EAs claim to use machine learning, neural networks or similar to predict price or to filter trades.

No edgeRead →

Do intermarket signals actually work?

Intermarket analysis trades one market from the behaviour of another: the Australian dollar from copper or gold, the yen from equi

No edgeRead →

Does hedging actually work as a trading strategy?

In retail EA marketing, hedging means opening a position opposite to a losing one rather than closing it, so that the loss stops g

ExplainerRead →

Does price action trading without indicators actually work?

Price action trading uses no indicators, reading instead the bars themselves, the swings, the levels and the candle shapes, and is

No edgeRead →
The ones that survived

See what Otto trades instead.

Most strategies do not survive an honest test. Otto is built on the few that did, and every trade is recorded live on Karnek.