HomeIndicators

Trading Indicators, Measured Against a Random Entry

Most indicator pages explain what a line does. These measure whether it pays. Every indicator below was run across 93 instruments and sixteen years of tick-derived data, with real spreads applied, and scored against the benchmark almost nobody shows: a random entry in the same direction with the same stop distance. The gap between those two numbers is all the indicator is actually worth.

Relative Strength Index (RSI)

The oversold exit is the strongest daily signal in the whole study. The overbought exit is not its mirror.

+3.0 pts best edge over a matched random entry · 47,705 signals

MACD

The most-tested signal here by sample size. Significant on the long side, and small enough that costs matter more than the signal.

+1.9 pts best edge over a matched random entry · 121,274 signals

Stochastic Oscillator

One side of this indicator has a small edge. The other is the closest thing to pure noise we measured.

+1.1 pts best edge over a matched random entry · 120,676 signals

Stochastic Momentum Index (SMI)

The double-smoothed stochastic. Beats the original on the long side, and unlike the original its short side is not quite dead.

+1.8 pts best edge over a matched random entry · 107,275 signals

Moving Averages

The most famous signal in retail trading, measured properly. It finishes last on daily charts and first on four-hour.

+1.9 pts best edge over a matched random entry · 139,518 signals

Bollinger Bands

Mean reversion at the band is the classic read. Measured, both sides come in under a point.

+1.0 pts best edge over a matched random entry · 91,583 signals

VWAP

Our largest sample by far. The mean-reversion trade works; the reclaim-VWAP trade everyone teaches does not.

+1.6 pts best edge over a matched random entry · 1,091,284 signals

Supertrend

The strongest daily trend signal here, and completely one-sided: the bull flip pays, the bear flip is nothing.

+2.4 pts best edge over a matched random entry · 40,455 signals

Ichimoku Kinko Hyo

Five lines, and only one of them earns its place: the downward cloud break. The famous cross does not.

+1.8 pts best edge over a matched random entry · 149,604 signals

Average True Range (ATR)

The rare signal that is significantly worse than random. ATR is a superb sizing tool and a poor entry trigger.

+1.1 pts best edge over a matched random entry · 67,204 signals

Why a random entry is the only honest benchmark

A win rate on its own means nothing. Indices, gold and crypto rose over 2010–2026, so a random long with a symmetric target won 51.8% of the time while a random short won 46.6%. Any long signal inherits that 5.2-point gap before its indicator does a single thing. Subtract the control column and most indicators contribute between nothing and two points.

That is the number we report on every page here, and it is why several famous signals score worse than their reputation.

Related research

Risk disclaimerTrading foreign exchange, CFDs, and other leveraged products carries a high level of risk and is not suitable for every investor — losses can exceed your deposits. Everything on this page is educational research, not financial advice. Historical and backtested results are hypothetical: they do not represent live trading and past performance does not guarantee future results.