The best indicator for Financials (XLF)
We backtested 382 indicators across daily, weekly and hourly charts on real Financials (XLF) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
Where Financials (XLF) 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.
Connors RSI-2
On the daily chart, this is the strongest risk-adjusted edge we found for Financials (XLF) over ~27.4 years — beating buy-and-hold by 1.6% CAGR.
Financials (XLF) on the daily 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 Financials (XLF) — trailing buy-and-hold by 3.3% 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 | Connors RSI-2 ✓ | Daily | 7.4% | 0.49 | -43.4% | 67.9% | 327 | 1.6% |
| 2 | TRIMA 200 Trend ✓ | Daily | 5.4% | 0.48 | -37.9% | 44.1% | 59 | -0.4% |
| 3 | Connors RSI ✓ | Daily | 7.3% | 0.47 | -46.5% | 69.3% | 326 | 1.5% |
| 4 | T3 200 Trend ✓ | Daily | 4.8% | 0.47 | -31.7% | 47.5% | 59 | -1.0% |
| 5 | DEMA 20/50 Cross ✓ | Weekly | 5.4% | 0.46 | -30.3% | 50.0% | 20 | -0.3% |
| 6 | WMA 200 Trend ✓ | Weekly | 5.3% | 0.46 | -36.1% | 55.6% | 18 | -0.4% |
| 7 | ALMA 100 Trend ✓ | Weekly | 5.0% | 0.46 | -24.0% | 42.9% | 35 | -0.7% |
| 8 | TRIMA 30 Trend ✓ | Weekly | 5.1% | 0.46 | -25.5% | 48.7% | 39 | -0.6% |
| 9 | Hull Suite ✓ | Weekly | 5.8% | 0.45 | -33.5% | 53.6% | 28 | 0.1% |
| 10 | WMA 10/40 Cross ✓ | Weekly | 5.6% | 0.45 | -37.3% | 52.2% | 23 | -0.1% |
| 11 | Awesome Oscillator ✓ | Weekly | 5.4% | 0.44 | -37.9% | 43.3% | 30 | -0.2% |
| 12 | EMA 8/21 Cross ✓ | Weekly | 5.3% | 0.43 | -30.1% | 40.7% | 27 | -0.4% |
| 13 | EMA 200 Trend ✓ | Weekly | 5.1% | 0.43 | -38.7% | 66.7% | 15 | -0.5% |
| 14 | Hull MA 200 Trend ✓ | Weekly | 4.1% | 0.43 | -24.6% | 45.2% | 31 | -1.6% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
What it would take to beat buy & hold on Financials (XLF)
3 of 665 tested setups beat buy-and-hold on Financials (XLF) outright. Another 311 could get there with leverage they would survive — but 239 would be liquidated by their own drawdown before they caught it.
| Indicator | Beats B&H unlevered | Leverage needed | Leverage survived |
|---|---|---|---|
| Connors RSI-2 | 1 | none needed | 2.88× |
| DeMarker | 1 | none needed | 4.61× |
| Connors RSI | 1 | none needed | 2.8× |
| Zero-Lag EMA Cross | — | 1.2× | 5.17× |
| ZLEMA 10/30 Cross | — | 1.2× | 5.17× |
| Zero-Lag LSMA | — | 1.27× | 3.84× |
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 Financials (XLF), Connors RSI-2 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.
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