Claim check: MACD crossover
“Buy when MACD crosses above its signal line, sell when it crosses below.”
What the data says
Partly Partly: the rule gave a higher Sharpe ratio than buy-and-hold in 6 of 10 markets over 2010-03-02 to 2026-11-10 and in both halves of the history in 2; the median CAGR was +4.0% against +4.4% for buy-and-hold and the median maximum drawdown -41.6% against -71.2% (before costs). It holds in some markets, not across the board.
It holds in some markets or periods, leans the right way without proof, or helps on risk but not on return.
Who says it
Gerald Appel's indicator (1979); the textbook example on Investopedia and TradingView.
Origins are as commonly cited and were not independently verified.
How we tested it
MACD line = 12-day EMA minus 26-day EMA of the close; signal line = 9-day EMA of the MACD. Long from the day after MACD is above its signal line, cash otherwise. The claim holds if the Sharpe ratio beats buy-and-hold in the full history and in both halves on most markets.
Results
| Market | Period | CAGR | Buy and hold | Sharpe | Buy and hold | Max drawdown | Buy and hold | In market | Trades | Reading |
|---|---|---|---|---|---|---|---|---|---|---|
| S&P 500 | 2010-03-05 → 2026-11-10 | +6.7% | +13.9% | 0.72 | 0.85 | -16% | -34% | 51% | 178 | No effect |
| Gold | 2010-03-05 → 2026-11-10 | +4.6% | +7.5% | 0.44 | 0.51 | -22% | -46% | 51% | 173 | No effect |
| Silver | 2010-03-05 → 2026-11-10 | +6.5% | +6.2% | 0.39 | 0.35 | -47% | -76% | 52% | 162 | Full history only |
| Oil | 2010-03-05 → 2026-11-10 | -1.3% | -4.8% | 0.08 | 0.05 | -63% | -95% | 52% | 172 | Full history only |
| Natural gas | 2010-03-05 → 2026-11-10 | -13.5% | -24.2% | -0.21 | -0.32 | -92% | -99% | 52% | 179 | Clear and stable |
| Commodities | 2010-03-05 → 2026-11-10 | +3.5% | +2.5% | 0.35 | 0.23 | -36% | -66% | 52% | 165 | Full history only |
| Agriculture | 2010-03-05 → 2026-11-10 | -0.1% | +1.2% | 0.03 | 0.16 | -37% | -62% | 52% | 173 | No effect |
| EUR/USD | 2010-03-02 → 2026-11-10 | -1.8% | -1.2% | -0.26 | -0.09 | -34% | -35% | 51% | 188 | No effect |
| Bitcoin | 2014-10-29 → 2026-11-10 | +66.7% | +56.5% | 1.13 | 0.84 | -49% | -83% | 52% | 147 | Clear and stable |
| Ether | 2017-12-21 → 2026-11-10 | +25.9% | +10.8% | 0.57 | 0.45 | -72% | -94% | 52% | 118 | Full history only |
Sharpe ratio minus buy-and-hold
Robustness: other settings
| Setting | Verdict on its own | Markets with a stable win | Markets where it won |
|---|---|---|---|
| Main setting | Partly | 2 / 10 | 6 / 10 |
| Only when MACD is above zero | Does not hold | 1 / 10 | 5 / 10 |
Stability across the two halves of history
A saying that only works in one half of the history is not much of a rule. Each row shows the effect in the full history, the first half and the second half; green means the claimed effect was present.
| Market | Full history | First half | Second half |
|---|---|---|---|
| S&P 500 | -0.13 2010-03-05 → 2026-11-10 | -0.28 2010-03-05 → 2018-07-06 | -0.02 2018-07-06 → 2026-11-10 |
| Gold | -0.07 2010-03-05 → 2026-11-10 | +0.23 2010-03-05 → 2018-07-06 | -0.35 2018-07-06 → 2026-11-10 |
| Silver | +0.04 2010-03-05 → 2026-11-10 | +0.15 2010-03-05 → 2018-07-06 | -0.05 2018-07-06 → 2026-11-10 |
| Oil | +0.03 2010-03-05 → 2026-11-10 | +0.35 2010-03-05 → 2018-07-06 | -0.21 2018-07-06 → 2026-11-10 |
| Natural gas | +0.11 2010-03-05 → 2026-11-10 | +0.25 2010-03-05 → 2018-07-06 | +0.02 2018-07-06 → 2026-11-10 |
| Commodities | +0.11 2010-03-05 → 2026-11-10 | +0.36 2010-03-05 → 2018-07-06 | -0.09 2018-07-06 → 2026-11-10 |
| Agriculture | -0.13 2010-03-05 → 2026-11-10 | +0.05 2010-03-05 → 2018-07-06 | -0.29 2018-07-06 → 2026-11-10 |
| EUR/USD | -0.17 2010-03-02 → 2026-11-10 | -0.11 2010-03-02 → 2018-07-05 | -0.26 2018-07-05 → 2026-11-10 |
| Bitcoin | +0.29 2014-10-29 → 2026-11-10 | +0.48 2014-10-29 → 2020-11-04 | +0.04 2020-11-04 → 2026-11-10 |
| Ether | +0.12 2017-12-21 → 2026-11-10 | +0.22 2017-12-21 → 2022-06-01 | -0.03 2022-06-01 → 2026-11-10 |
Context and cross-checks
Shown for context; not part of the verdict.
The site's own strategies
| Strategy | Market | Sharpe, 5 years | Benchmark, 5 years | Sharpe, full | Benchmark, full | CAGR, full | Benchmark, full | Max DD, full | Benchmark, full | Reading |
|---|---|---|---|---|---|---|---|---|---|---|
| TREND-12 MACD Strategy | SPY | 0.30 | 0.72 | 0.63 | 0.85 | +5.8% | +13.8% | -17% | -34% | No effect |
| TREND-12 MACD Strategy | GLD | 0.44 | 0.89 | 0.39 | 0.51 | +4.0% | +7.5% | -25% | -46% | No effect |
| TREND-12 MACD Strategy | USO | -0.12 | 0.68 | 0.04 | 0.05 | -2.3% | -4.8% | -66% | -95% | No effect |
| TREND-12 MACD Strategy | EUR/USD | -0.16 | -0.05 | -0.24 | -0.13 | -1.6% | -1.5% | -34% | -35% | No effect |
| TREND-12 MACD Strategy | DBC | 0.44 | 0.63 | 0.42 | 0.21 | +4.3% | +2.2% | -34% | -66% | Full history only |
| TREND-12 MACD Strategy | SLV | 0.56 | 0.57 | 0.40 | 0.35 | +6.6% | +6.1% | -47% | -76% | Full history only |
| TREND-12 MACD Strategy | DBA | 0.24 | 0.68 | 0.04 | 0.13 | 0.0% | +0.8% | -33% | -62% | No effect |
| TREND-12 MACD Strategy | UNG | -0.48 | -0.27 | -0.27 | -0.35 | -15.3% | -25.1% | -95% | -99% | Full history only |
| TREND-12 MACD Strategy | BTC | 0.38 | 0.25 | 1.05 | 0.80 | +59.0% | +52.0% | -58% | -83% | Clear and stable |
| TREND-12 MACD Strategy | ETH | 0.25 | 0.09 | 0.64 | 0.56 | +31.7% | +22.9% | -72% | -94% | Clear and stable |
| COMBO-02 MACD + RSI Filter | SPY | 0.51 | 0.72 | 0.72 | 0.85 | +6.2% | +13.8% | -15% | -34% | No effect |
| COMBO-02 MACD + RSI Filter | GLD | 0.53 | 0.89 | 0.24 | 0.51 | +1.7% | +7.5% | -22% | -46% | No effect |
| COMBO-02 MACD + RSI Filter | USO | -0.23 | 0.68 | 0.11 | 0.05 | 0.0% | -4.8% | -67% | -95% | Full history only |
| COMBO-02 MACD + RSI Filter | EUR/USD | 0.08 | -0.05 | -0.09 | -0.13 | -0.6% | -1.5% | -24% | -35% | Clear and stable |
| COMBO-02 MACD + RSI Filter | DBC | 0.62 | 0.63 | 0.55 | 0.21 | +4.8% | +2.2% | -31% | -66% | Full history only |
| COMBO-02 MACD + RSI Filter | SLV | 0.39 | 0.57 | 0.04 | 0.35 | -0.5% | +6.1% | -43% | -76% | No effect |
| COMBO-02 MACD + RSI Filter | DBA | 0.59 | 0.68 | 0.08 | 0.13 | +0.3% | +0.8% | -35% | -62% | No effect |
| COMBO-02 MACD + RSI Filter | UNG | -0.12 | -0.27 | -0.23 | -0.35 | -10.6% | -25.1% | -90% | -99% | Clear and stable |
| COMBO-02 MACD + RSI Filter | BTC | 0.10 | 0.25 | 0.52 | 0.80 | +15.8% | +52.0% | -46% | -83% | No effect |
| COMBO-02 MACD + RSI Filter | ETH | 0.12 | 0.09 | 0.52 | 0.56 | +20.1% | +22.9% | -69% | -94% | No effect |
Sharpe ratio minus benchmark, full history · Benchmark = the buy-and-hold shown on the strategy pages.
The honest caveat
Signals are numerous so costs matter; none are included here.
Descriptive statistics from historical data, before costs. Not a forecast and not investment advice.
Questions
Buy when MACD crosses above its signal line, sell when it crosses below.
Partly: the rule gave a higher Sharpe ratio than buy-and-hold in 6 of 10 markets over 2010-03-02 to 2026-11-10 and in both halves of the history in 2; the median CAGR was +4.0% against +4.4% for buy-and-hold and the median maximum drawdown -41.6% against -71.2% (before costs). It holds in some markets, not across the board.
How was this claim tested?
MACD line = 12-day EMA minus 26-day EMA of the close; signal line = 9-day EMA of the MACD. Long from the day after MACD is above its signal line, cash otherwise. The claim holds if the Sharpe ratio beats buy-and-hold in the full history and in both halves on most markets.
Related strategies on Quant Arena
Markets used
S&P 500 · Gold · Silver · Oil · Natural gas · Commodities · Agriculture · EUR/USD · Bitcoin · Ether