Trading Bitcoin with the Parabolic SAR
Buy when the Parabolic SAR flips below Bitcoin’s price: the day’s high breaks above the SAR, which ends a downtrend and starts an uptrend. 165 trades, 48% winners, 35.1% a year against 56.9% for buy-and-hold.
The Setup Lab
Every trader has heard that a golden cross is bullish and an RSI under 30 is a buy. Here I test those signals one at a time, on real daily data going back as far as it goes, with the same scorecard every time. No cherry-picked charts.
10 tests so far- 1 Fibonacci 61.8% bounceEUR/USD · 2004–2026 1.5%Per year −0.4%Buy & hold 57%Win rate −10%Max drawdown
- 2 Ichimoku cloudEUR/USD · 2004–2026 −0.41%Per year −0.44%Buy & hold 32%Win rate −28%Max drawdown
- 3 Golden crossS&P 500 · 1970–2026 7.5%Per year 8.4%Buy & hold 81%Win rate −34%Max drawdown
- 4 20-day breakoutBitcoin · 2014–2026 53.9%Per year 58.7%Buy & hold 44%Win rate −57%Max drawdown
- 5 Bollinger Band bounceGold · 2000–2026 4.2%Per year 11.0%Buy & hold 78%Win rate −16%Max drawdown
- 6 MACD crossoverGold · 2000–2026 4.3%Per year 11.3%Buy & hold 48%Win rate −32%Max drawdown
- 7 Bullish engulfingS&P 500 · 2014–2026 −0.3%Per year 11.9%Buy & hold 38%Win rate −20%Max drawdown
- 8 Hammer at the 50-dayS&P 500 · 2014–2026 −0.6%Per year 11.9%Buy & hold 50%Win rate −8%Max drawdown
- 9 Parabolic SARBitcoin · 2014–2026 35.1%Per year 56.9%Buy & hold 48%Win rate −71%Max drawdown
- 10 RSI under 30Bitcoin · 2014–2026 14.4%Per year 57.5%Buy & hold 71%Win rate −67%Max drawdown
Long only, no costs, signals on the close, trades at the next close. Past results don’t predict future ones. All tests and the method
All tests
The bullish engulfing candle on the S&P 500
Buy when the S&P 500 prints a bullish engulfing pattern after a fall: a down day (close below open) followed by an up day whose body completely covers it, opening at or below the first day’s close and closing above the first day’s open. 40 trades, 38% winners, −0.3% a year against 11.9% for buy-and-hold.
Trading EUR/USD above the Ichimoku cloud
Buy when EUR/USD closes above the Ichimoku cloud: above both Leading Span A and Leading Span B. 177 trades, 32% winners, −0.41% a year against −0.44% for buy-and-hold.
Buying gold at the lower Bollinger Band
Buy when gold closes below the lower Bollinger Band: the 20-day simple moving average minus two standard deviations of the same 20 closes. 106 trades, 78% winners, 4.2% a year against 11.0% for buy-and-hold.
The 20-day breakout on Bitcoin
Buy when Bitcoin closes above the highest high of the previous 20 days. 63 trades, 44% winners, 53.9% a year against 58.7% for buy-and-hold.
The hammer candle at the 50-day moving average on the S&P 500
Buy when the S&P 500 prints a hammer that touches its 50-day moving average: the day’s low is at or below the 50-day and the close is at or above it. 8 trades, 50% winners, −0.6% a year against 11.9% for buy-and-hold.
Buying the 61.8% Fibonacci retracement on EUR/USD
Buy when EUR/USD, after closing at or below the 61.8% retracement of its last rally, closes back above it. 30 trades, 57% winners, 1.5% a year against −0.4% for buy-and-hold.
The MACD crossover on gold
Buy when the MACD line (12-day EMA minus 26-day EMA) closes above its 9-day signal line. 264 trades, 48% winners, 4.3% a year against 11.3% for buy-and-hold.
Buying Bitcoin when RSI drops under 30
Buy when the 14-day RSI closes below 30 (the textbook “oversold” line). 21 trades, 71% winners, 14.4% a year against 57.5% for buy-and-hold.
The golden cross on the S&P 500: 56 years of data
Buy when the 50-day moving average closes above the 200-day moving average (the golden cross). 27 trades, 81% winners, 7.5% a year against 8.4% for buy-and-hold.
How every test is run
- One signal, one market, long only. Fully in or fully out, cash in between.
- No look-ahead. The signal is read on a day’s close; the trade happens at the next day’s close.
- No costs. No commissions, slippage, interest or dividends. Real trading would do worse, more so for busy signals.
- Same period for the benchmark. Buy-and-hold is measured over exactly the days the test covers.
- Re-runnable. Prices are daily data from Yahoo Finance, saved as a dated snapshot. Every test is checked by a second, independent program before it goes up.
Not financial advice. This is educational content, shared for information and entertainment only, and it is not a recommendation to buy or sell any asset. Backtests and past results do not guarantee future results, and the numbers or charts here may contain mistakes. Trading carries risk, including losing all the money you put in. Do your own research before you make any decision.