PriceEdge ยท Research library
Every idea we tested, including the ones that failed.
Each idea went through the same process: rules and the pass mark written down before the test, variants compared on 2023 to 2024, the best confirmed on 2021 to 2022, and the held-out period from 2025 used once. Figures include spread, commission and swap. A profit factor below 1.2 fails the bar for going live.
Saying no is most of the work: of 13 ideas, one passed every test and went live.
| Idea | Source | What we tested | Result | Verdict |
|---|---|---|---|---|
| RSI-2 mean reversion | Larry Connors | Buy a 2-day oversold dip in a trend, out on the bounce | Profit factor 1.36 to 1.48 in all three periods | Live |
| J16, traded mechanically | J16 price action method | Every J16 setup taken blindly, all four FTA plans | About break-even on the instruments it was built on; on 24 instruments it was never tuned on, 139 trades at profit factor 0.84 | In forward test |
| NR4 / inside-day breakout | Toby Crabel; Connors & Raschke, Street Smarts | Trade the break of the quietest day of the last 4; textbook ID/NR4 and 64 more variants | Best profit factor 1.02 on 2023 to 2024; the best subset failed on 2021 to 2022 | |
| Trend pullback | Linda Raschke's "Holy Grail" | Buy the dip to the 20-day average in a trend, with and without her ADX filter (48 variants) | Profit factor 0.93; the one variant that passed failed on 2021 to 2022 (0.89) | |
| RSI-2 loosened | Our own variant | Looser RSI and limit settings for more trades | Two to three times the trades for the same total, with deeper drawdowns; the best three failed on 2021 to 2022 | Live version kept |
| RSI-2 early profit (level-out) | Our own variant | Close once the trade is in profit and price has stopped making new highs for a few hours, instead of waiting for the daily close beyond the average (9 variants) | Wins more often (up to 73% against 63%) but every variant made less in total on 2023 to 2024; the trades closed early would have done better if left | Live version kept |
| RSI-2 on more markets | Our own test | The live RSI-2 settings on oil and gas, platinum, palladium and copper, Bitcoin and Ether, Scandinavian and other exotic currencies | All five groups failed; oil came closest (profit factor 1.57 and 1.84, then 1.18 in 2025 onwards), and also failed a check on 2020, the one year not tested before (0.88). Wide spreads and swap eat the small edge on exotics and metals | |
| RSI-2 on more FX crosses | Our own test | The live RSI-2 settings on nine crosses (AUDCAD, EURCAD, GBPCAD, CADCHF, AUDCHF, AUDNZD, EURCHF, GBPAUD, GBPCHF), on the years never tested for them | Profit factor 1.12 on 2021 to 2022 and 0.76 on 2020; over four periods only 2025 onwards clears the bar | Watching on demo |
| IBS | Internal Bar Strength studies | Buy a close in the bottom 20% of the day's range | Many trades, no edge: profit factor 0.90 to 1.08 | |
| Double 7 | Connors & Alvarez | Buy a 7-day closing low, sell a 7-day closing high | Best profit factor 1.12 (indices) | |
| Turn of the month | Studies of index returns around month end | Long indices over the last and first days of a month | Profit factor 1.61 on 2023 to 2024, then 0.89 to 0.97 on 2021 to 2022 | |
| USD after the London fix | Krohn, Mueller & Whelan, Journal of Finance (2024) | Sell USD after the 4 PM London fix, out at the New York close | Best profit factor 1.06; whatever drift there is goes to costs | |
| Index momentum into the close | Gao, Han, Li & Zhou, Journal of Financial Economics (2018) | Trade the day's index move into the cash close | Profit factor 1.35 at one threshold, but the next threshold lost (0.84): a lucky cut-off, not an effect |
What the research taught us
Many published edges are real in the data they were found in and gone after costs or in other years. A short, sharp dip in a trend (RSI-2) is the one pattern that held up in every period we tested. Ideas on hourly candles struggle because the spread is large next to a few hours' move.
Backtested results, including spread, commission and swap. Past results are not a promise of future results.