The short answer
Not on CFDs at retail costs, the way most traders run it. The classic 55-day breakout with a 20-day exit, untuned, across 24 markets lost -0.03R to -0.08R a trade from 2021 to 2026, and holding over weekends lost far more once swap was counted. A volatility-scaled portfolio across the same markets made +2.7% a year before costs in 2024-26 but -0.4% after them. Trend following has a strong long-run record as a slow, diversified futures portfolio; that is a different strategy from per-instrument trend trades on CFDs.
What we tested
- Markets
- 24 markets: FX majors and crosses, gold, silver, oil, stock indices, crypto, large US stocks
- Period
- Dec 2020 to Oct 2026
- Buy (sell) on a close above (below) the 55-day high (low); exit on the opposite 20-day level; stop 2 x ATR(20). Untuned.
- Two versions: closing every Friday, or holding over weekends.
- Separately: a volatility-scaled trend portfolio across the same 24 markets, rebalanced weekly.
Results
| Version | Period | Trades | Average R | Random entries | Markets positive |
|---|---|---|---|---|---|
| Friday close | 2021-24 | 1,033 | -0.03R | -0.07R | 10 of 24 |
| Friday close | Year 1 | 333 | -0.07R | -0.03R | 7 of 24 |
| Friday close | Year 2 | 253 | -0.08R | -0.02R | 7 of 24 |
| Weekend hold | 2021-24 | 408 | -0.31R | -0.24R | 5 of 24 |
| Weekend hold | Year 1 | 104 | +0.31R | -0.12R | 11 of 24 |
| Weekend hold | Year 2 | 118 | -0.63R | -0.44R | 1 of 24 |
| Period | Before costs | After costs and swap |
|---|---|---|
| 2021-23 | -2.0% a year | -3.8% a year |
| 2024-26 | +2.7% a year (Sharpe 0.67) | -0.4% a year |
What it means
- Swap at the broker's rates cost about 0.03R a trade with the Friday close and 0.18R holding over weekends.
- On gold alone, the untuned 55/20 rule with a Friday close was the only gold result better than chance over 2021-26 (+0.08R on 76 trades), but year 2 was negative and the size was small.
- Academic studies find trend profits in major currencies disappeared by the mid-1990s for simple rules; the long-run successes use many markets, positions sized by volatility, and holding periods of months.
Limits of this test
- Two to six years is short for trend following, which can need a decade to judge.
- CFD costs and swaps; futures carry different costs.
Frequently asked questions
Is trend following still profitable in forex?
Simple trend rules on major currencies stopped beating costs in the 1990s according to academic studies, and our 2021-26 test with retail CFD costs and swap agrees. Diversified, volatility-scaled trend portfolios over many years are a different case.
How every test on these pages works
- Prices: the broker's own bars from an FTMO cTrader account. Fills are simulated minute by minute on one-minute bars; when one minute touches both the stop and the target, the stop is assumed to fill first.
- Costs: the broker's bid/ask spread measured by hour of day, commission per market, and the broker's own overnight swap rates for anything held past the daily rollover.
- Periods: year 1 = 24 Oct 2024 to 23 Oct 2025, year 2 = 24 Oct 2025 to 24 Oct 2026. Daily rules also use Dec 2020 to Oct 2024 ("2021-24"). Rules are written down before testing and are not tuned on the period that judges them.
- Controls: every rule is compared with entries that have no reason behind them (random sides, random days, or the same rule at fake levels), so a result has to beat chance, not just be positive.
- R is the trade's risk (entry to stop). An average of +0.10R means the average trade made a tenth of what it risked; -0.10R means it lost a tenth.
The full results for the rules RezSync Algo trades, by market and risk profile with every trade downloadable, are in the backtest report.
Published research
Related research
Research, not financial advice. These are simulated results on historical prices: they involve no real money, are produced with hindsight of the rules, and past results do not predict future ones. Costs and fills are modelled, and your broker's prices and costs will differ. Trading leveraged products carries a high risk of losing money; test on a demo account first.