Investment Strategies & Instruments
Which Algorithmic Trading Strategies Are Actually Profitable? Evidence, Costs and a Backtest (2026)
No algorithmic trading strategy is profitable in itself. Trend following, momentum, mean reversion and pairs trading each have published evidence, but whether an edge survives depends on costs, capacity and out-of-sample testing. On 33 years of SPY data, a breakout rule this article once recommended returned 3% a year; a 10-month moving average kept most of the index return at half the drawdown.