Shocking Results: Only 5% of Technical Analysis Indicators Actually Beat The SPY Benchmark Over 20 Years

Technical Analysis Indicators

Exactly 39, or about 5%, of the 766 different long-only technical analysis indicators we backtested beat the benchmark SPY overall net return.

This, unfortunately, means that more than 95% of technical analysis settings underperformed.

And the question you have to ask yourself now is, “Am I currently using a technical analysis indicator that is doomed?”

For me, this data point wasn’t that surprising. What did come as a slight shock to me was actually how successful the 5% of indicators that outperformed were.

On average, they beat the SPY by more than 2,602%. When you look at the 20-year return of the index below you’ll see that these top indicators didn’t just marginally inch out the SPY, they crushed it.

SPY Benchmark Performance

So what would it look like if you compared the most profitable indicators to the SPY’s equity curve during the same period…

Here’s just one example of a $10,000 simulated portfolio we backtested with our Top 5 indicators. Notice that the best performing indicator settings increased the portfolio value from $10k to nearly $350k. Extremely impressive on many levels.

Simulated Stock Portfolio

And this is just one of the major results you’ll discover when you purchase a copy of our new backtesting report entitled “SIGNALS“. Plus, you can download a short 10-page sample of the report here.

Have questions about our report? Feel free to add your comments below this post and I’ll personally respond to each and every one of them.

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About The Author

Kirk Du Plessis

Kirk founded Option Alpha in early 2007 and currently serves as the Head Trader. In 2018, Option Alpha hit the Inc. 500 list at #215 as one of the fastest growing private companies in the US. Formerly an Investment Banker in the Mergers and Acquisitions Group for Deutsche Bank in New York and REIT Analyst for BB&T Capital Markets in Washington D.C., he's a Full-time Options Trader and Real Estate Investor. He's been interviewed on dozens of investing websites/podcasts and he's been seen in Barron’s Magazine, SmartMoney, and various other financial publications. Kirk currently lives in Pennsylvania (USA) with his beautiful wife and three children.