The best indicator for Junk Bonds
We backtested 382 indicators across daily, weekly and hourly charts on real Junk Bonds history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
RSI (50)
On the daily chart, this is the strongest risk-adjusted edge we found for Junk Bonds over ~18.5 years — beating buy-and-hold by 0.6% 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 | RSI (50) ✓ | Daily | 5.6% | 0.95 | -11.0% | 46.2% | 65 | 0.6% |
| 2 | Vortex ✓ | Daily | 6.2% | 0.94 | -11.7% | 44.4% | 187 | 1.2% |
| 3 | Random Walk Index ✓ | Daily | 6.1% | 0.93 | -11.8% | 46.4% | 192 | 1.1% |
| 4 | Random Walk Index ✓ | Daily | 6.1% | 0.93 | -11.8% | 46.4% | 192 | 1.1% |
| 5 | Vegas Tunnel ✓ | Daily | 4.6% | 0.92 | -10.4% | 38.0% | 50 | -0.4% |
| 6 | EMA 100 Trend ✓ | Daily | 5.4% | 0.92 | -11.0% | 46.2% | 65 | 0.5% |
| 7 | Disparity (100) ✓ | Daily | 5.4% | 0.92 | -11.0% | 46.2% | 65 | 0.5% |
| 8 | EMA 200 Trend ✓ | Daily | 5.2% | 0.89 | -10.6% | 42.0% | 50 | 0.2% |
| 9 | Disparity (20) ✓ | Weekly | 5.6% | 0.89 | -10.5% | 50.0% | 36 | 0.7% |
| 10 | CCI Trend ✓ | Daily | 5.7% | 0.88 | -10.5% | 46.3% | 188 | 0.8% |
| 11 | Awesome Oscillator ✓ | Weekly | 5.5% | 0.88 | -9.6% | 80.0% | 15 | 0.5% |
| 12 | Ehlers Decycler ✓ | Weekly | 5.5% | 0.88 | -10.5% | 50.0% | 38 | 0.5% |
| 13 | RSI (9) ✓ | Weekly | 5.5% | 0.88 | -10.4% | 46.7% | 45 | 0.5% |
| 14 | HLC Trend ✓ | Weekly | 5.4% | 0.88 | -9.2% | 47.1% | 34 | 0.5% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For Junk Bonds, RSI (50) on the daily timeframe gave the best balance of return and risk in our test. It beat buy-and-hold — but remember: this is a hypothetical backtest of a standard rule, not a recommendation. Markets change. See the methodology and disclaimer.
More etf
Get the weekly edge report
The best-performing indicator per asset, what changed this week, and the honest caveats — straight to your inbox.