Backtest evidence

Does trading the direction of a moving average remain profitable across periods and lookbacks?

Moving Average Slope Settings: 2,100 Tests

Finding

Settings profitable in both years: M15 93/175, H1 104/175, H4 28/175. The default SMA 20 with a five-bar lookback made money in both years on H1, but lost in the first half of 2025.

Key results

Settings profitable in both years
H1: 104/175
Default, H1, 2025
289 trades, 39.45% wins, +875.5 pips

Scope

  • USDJPY, 2024 and 2025, plus each half of 2025
  • 7 periods × 5 lookbacks × 5 methods × 3 timeframes × 4 windows = 2,100 runs
  • Fixed 0.3-pip spread, 0.1 lot

Method

Measured with Formiq's backtester. Buy when the current MA exceeds its value at the lookback bar; otherwise sell. Close and reverse at the close when the condition changes.

Limitations

  • Two historical years of USDJPY do not establish future profitability or transfer to other pairs.
  • Signals and fills share the bar close. Spread is fixed; slippage and swaps are excluded.