The best indicator for Russell 2000 (IWM)
We backtested 382 indicators across daily, weekly and hourly charts on real Russell 2000 (IWM) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
Where Russell 2000 (IWM) stands
Computed from our own daily OHLCV history, not quoted from a third party. Moving averages use closing prices; "52-week" is the last 252 trading sessions.
SMC: Change of Character
On the 4-hour chart, this is the strongest risk-adjusted edge we found for Russell 2000 (IWM) over ~3.9 years — trailing buy-and-hold by 0.0% CAGR.
Russell 2000 (IWM) on the 4-hour chart
The timeframe our backtest found best for this asset. The chart is live market data; the results above are hypothetical and historical.
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Best multi-indicator combo
Going long only when all 2 agree was the strongest confluence setup we found for Russell 2000 (IWM) — trailing buy-and-hold by 5.0% CAGR, out-of-sample. Fewer, higher-conviction trades than any single indicator.
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 | SMC: Change of Character ✓ | 4-Hour | 10.9% | 0.92 | -10.2% | 64.7% | 17 | 0.0% |
| 2 | TEMA 20/50 Cross ✓ | 4-Hour | 9.0% | 0.8 | -14.1% | 34.3% | 35 | -1.9% |
| 3 | CCI ✓ | Weekly | 7.0% | 0.6 | -29.9% | 89.7% | 29 | -1.6% |
| 4 | Connors RSI ✓ | Daily | 7.6% | 0.57 | -47.2% | 65.4% | 321 | -1.0% |
| 5 | WaveTrend (8/6/4) ✓ | 4-Hour | 9.5% | 0.72 | -22.9% | 76.9% | 26 | -1.4% |
| 6 | SMA 20/50 Cross ✓ | 4-Hour | 8.5% | 0.72 | -15.6% | 52.9% | 17 | -2.4% |
| 7 | Standard Error Bands ✓ | 4-Hour | 3.2% | 0.71 | -5.2% | 50.0% | 18 | -7.7% |
| 8 | Waddah Attar Explosion ✓ | 4-Hour | 4.4% | 0.66 | -9.0% | 33.3% | 75 | -6.5% |
| 9 | DEMA 100 Trend ✓ | 4-Hour | 6.8% | 0.65 | -14.3% | 40.7% | 59 | -4.1% |
| 10 | Markov Regime (Confirmed) ✓ | 4-Hour | 2.1% | 0.65 | -2.8% | 63.6% | 22 | -8.8% |
| 11 | Markov Regime ✓ | 1-Hour | 16.8% | 0.86 | -29.4% | 60.6% | 33 | 2.0% |
| 12 | McGinley 10/30 Cross ✓ | Daily | 6.9% | 0.49 | -38.7% | 42.0% | 50 | -1.8% |
| 13 | Supertrend (10,3) ✓ | Weekly | 6.3% | 0.48 | -29.1% | 52.9% | 17 | -2.3% |
| 14 | Trend Magic ✓ | Weekly | 6.4% | 0.48 | -33.1% | 53.3% | 75 | -2.2% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
What it would take to beat buy & hold on Russell 2000 (IWM)
10 of 1361 tested setups beat buy-and-hold on Russell 2000 (IWM) outright. Another 432 could get there with leverage they would survive — but 307 would be liquidated by their own drawdown before they caught it.
| Indicator | Beats B&H unlevered | Leverage needed | Leverage survived |
|---|---|---|---|
| Zero-Lag MACD | 2 | 4.04× | 3.95× |
| QQE | 1 | 1.74× | 4.33× |
| DeMarker (21) | 1 | 1.5× | 4.31× |
| Connors RSI | 1 | 1.63× | 6.21× |
| Relative Volatility Index | 1 | 2.01× | 4.58× |
| Chaikin Oscillator | 1 | 3.4× | 5.08× |
Out-of-sample, costs included. A setup is only listed if the leverage it needs is less than the leverage its own worst drawdown survives — when it isn't, no amount of leverage gets there. Volatility drag isn't modelled, so these are the optimistic case. Every indicator, ranked this way
For Russell 2000 (IWM), SMC: Change of Character on the 4-hour 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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