Does anything beat buy & hold on Heating Oil (HO)?
Every setup we tested on Heating Oil (HO) — ranked out-of-sample, corrected for multiple testing, and forward-tracked in public from the day this page published. The honest answer is the headline.
No setup beat simply holding once tested honestly. We say so plainly.
Its best setup only beat buy-and-hold in one window — a regime artifact, not a strategy. Buy-and-hold benchmark: +6.1% CAGR over 26.2 years (+11.9% CAGR in the out-of-sample window).
Educational research from historical backtests — not investment advice. Past performance does not predict future results.
Heating Oil: Nothing Survived Honest Testing
We ran 745 indicator setups against Heating Oil (HO), and none earned a pass. Macro instruments like this are hard terrain for timing systems: roll costs quietly tax every position, returns arrive in regime-driven bursts separated by long flat stretches, and a rule tuned to one macro environment tends to break in the next. The best-looking candidate, Bullish Engulfing on the weekly timeframe, looked strong in-sample — which is exactly what you'd expect from the winner of hundreds of tries — and then failed to hold up on data it had never seen.
Read the numbers with the selection problem in mind. When you pick the best of 745 attempts, luck alone produces impressive backtests, so we require an out-of-sample Sharpe above a multiple-testing hurdle of 1.29. Here the top setup managed 1.08, with out-of-sample alpha of +5.2% against a buy-and-hold CAGR of +6.1%. Across all setups, only 23.0% beat holding at all. That's the finding for this window of history — markets change, and past results, good or bad, predict nothing.
Every figure above is computed from our own backtests — nothing is estimated or invented. Hypothetical results; not investment advice.
The least-bad setups — shown with their failure numbers
Nothing here earned a verdict — these are the best of a losing field, published so you can see exactly how "best" still failed.
Bullish Engulfing
What it is: A market-structure rule: it reacts to swing structure and prior levels rather than to a smoothed average. Long/flat only — no leverage, no shorting. The parameters we tested are not published.
How it was tested: signals evaluated at weekly-bar close, the position changes on the NEXT bar, 0.08% cost per side. Same engine, same cost model, same out-of-sample split as every other number on this site.
Out-of-sample (last ~30% of the window, never used to pick this setup): Sharpe 1.08 · alpha +5.2% · 18 trades over 7.9 yrs.
Fisher Transform
What it is: An oscillator rule: it reads a bounded momentum gauge and takes exposure when it turns from an extreme. Long/flat only — no leverage, no shorting. The parameters we tested are not published.
How it was tested: signals evaluated at weekly-bar close, the position changes on the NEXT bar, 0.08% cost per side. Same engine, same cost model, same out-of-sample split as every other number on this site.
Out-of-sample (last ~30% of the window, never used to pick this setup): Sharpe 0.77 · alpha +11.4% · 32 trades over 7.9 yrs.
Predictive Ranges
What it is: A channel / envelope rule: it measures how far price has travelled from a moving reference and acts at the extremes. Long/flat only — no leverage, no shorting. The parameters we tested are not published.
How it was tested: signals evaluated at daily-bar close, the position changes on the NEXT bar, 0.08% cost per side. Same engine, same cost model, same out-of-sample split as every other number on this site.
Out-of-sample (last ~30% of the window, never used to pick this setup): Sharpe 0.76 · alpha +8.6% · 75 trades over 7.8 yrs.
Since publication — including if it loses
Buy-and-hold is ahead so far — we publish that too. That is the point. Marked to market nightly from real prices, rules frozen at publication, as of 2026-10-19. Currently FLAT.
We tested 745 setups (indicator × parameters × timeframe) on Heating Oil (HO). Only setups with ≥30 trades qualify (649 did). Setups are ranked by out-of-sample Sharpe — the last ~30% of history, which standard-parameter rules never saw during selection. Because picking the best of 745 tries mines even the holdout, the VALIDATED verdict additionally requires the top setup’s OOS Sharpe to clear a selection hurdle of 1.29 (√(2 ln N)/√T) AND positive alpha in both windows. Of the eligible setups, 23.0% had positive out-of-sample alpha (median OOS Sharpe 0.39) — the table below is truncated, but this summary covers all of them. How we test: methodology. The scoring contract is published in full; the parameters of each individual setup are not.
Top 20 of 649 eligible setups
Ranked by out-of-sample Sharpe. Full + out-of-sample columns, costs included. Hypothetical.
| # | Setup | TF | Total ret | Sharpe | Max DD | Win | Trades | α vs B&H | OOS Sharpe | OOS α | OOS trades |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Bullish Engulfing | Weekly | +272.5% | 0.37 | -46.5% | 56.7% | 60 | -0.9% | 1.08 | +5.2% | 18 |
| 2 | Fisher Transform | Weekly | +224.0% | 0.3 | -66.6% | 44.1% | 127 | -1.5% | 0.77 | +11.4% | 32 |
| 3 | Predictive Ranges | Daily | +123.7% | 0.25 | -68.6% | 34.3% | 277 | -3.0% | 0.76 | +8.6% | 75 |
| 4 | FRAMA 100 Trend | Daily | +89.3% | 0.23 | -74.0% | 42.1% | 565 | -3.6% | 0.74 | +8.2% | 154 |
| 5 | Supertrend Fast (10,2) | Daily | +341.2% | 0.35 | -50.1% | 40.5% | 158 | -0.2% | 0.73 | +7.4% | 41 |
| 6 | Supertrend (10,2) | Daily | +341.2% | 0.35 | -50.1% | 40.5% | 158 | -0.2% | 0.73 | +7.4% | 41 |
| 7 | Chande Kroll Stop | Daily | +361.4% | 0.35 | -63.6% | 37.2% | 406 | -0.0% | 0.71 | +9.3% | 114 |
| 8 | DeMarker (21) | Daily | +138.0% | 0.26 | -60.2% | 41.3% | 247 | -2.7% | 0.71 | +6.7% | 55 |
| 9 | Ease of Movement | Daily | +301.1% | 0.34 | -53.6% | 42.3% | 333 | -0.6% | 0.7 | +6.2% | 90 |
| 10 | Ehlers Relative Vigor | Weekly | >+999% | 0.5 | -45.7% | 48.2% | 110 | +4.2% | 0.69 | +8.1% | 31 |
| 11 | Supertrend (7,2) | Daily | +167.9% | 0.28 | -62.0% | 39.5% | 162 | -2.2% | 0.69 | +5.8% | 42 |
| 12 | HalfTrend | Daily | +204.2% | 0.3 | -67.5% | 42.0% | 169 | -1.7% | 0.68 | +6.2% | 46 |
| 13 | Half Trend | Daily | +203.2% | 0.29 | -67.5% | 42.0% | 169 | -1.7% | 0.68 | +6.2% | 46 |
| 14 | TEMA 30 Trend | Daily | +89.7% | 0.22 | -64.5% | 43.7% | 545 | -3.6% | 0.68 | +4.5% | 150 |
| 15 | Relative Vigor Index | Weekly | +577.2% | 0.4 | -50.4% | 51.5% | 101 | +1.5% | 0.67 | +7.3% | 28 |
| 16 | Klinger Oscillator | Weekly | +724.9% | 0.44 | -40.7% | 48.5% | 134 | +2.3% | 0.67 | +6.4% | 38 |
| 17 | Price Volume Trend | Daily | +351.5% | 0.35 | -46.1% | 41.5% | 354 | -0.1% | 0.67 | +5.9% | 98 |
| 18 | Ehlers SuperSmoother | Daily | +72.6% | 0.21 | -79.8% | 45.4% | 901 | -4.0% | 0.67 | +5.7% | 266 |
| 19 | Disparity (5) | Weekly | +251.5% | 0.31 | -52.1% | 43.2% | 176 | -1.2% | 0.66 | +6.4% | 49 |
| 20 | EMA-10 Trend | Daily | +5.2% | 0.14 | -80.3% | 43.3% | 601 | -5.9% | 0.66 | +5.3% | 173 |
Hypothetical backtests with 0.08%/side costs. Not investment advice — see the full disclaimer.
These are historical backtests of mechanical rules. They are educational research, not investment advice, not a recommendation, and not tailored to you. Educational information only — not investment advice. Hypothetical backtested results; past performance does not guarantee future results. Trading involves risk of loss.