How the Stochastic Crossover Works
The stochastic crossover is one of the most widely-used signals in trading. It’s simple, mechanical, and removes emotional decision-making from your trading by generating clear entry and exit signals based on the Stochastic indicator.
On ETH, the Stochastic acts as a trend filter. It won’t catch every exact bottom, but it reliably captures the meat of major moves while keeping you out of chop.
5-Year Performance on ETH
Over five years (2021-07-05 → 2026-07-03), the Stochastic Crossover delivered a -37.1% total return on ETH-USD, compounding at -8.8% annually.
At -0.23, the Stochastic earned less than one units of return for every unit of risk taken. For context, anything above 1.0 is considered good; above 1.5 is excellent.
The catch? A 63.6% max drawdown. At some point during this 5-year run, you’d have been down nearly 64% from peak equity. That’s stomach-churning territory for most traders. If you can’t handle that kind of drawdown, this isn’t for you — or you need to size down.
Risk Assessment
| Metric | Value | Verdict |
|---|---|---|
| Sharpe Ratio | -0.23 | ❌ Weak |
| Max Drawdown | 63.6% | ⚠️ Significant |
| Win Rate | 34.2% | ❌ Low — relies on outsized wins |
| Profit Factor | 0.93 | ❌ Unprofitable |
| Trades/Year | ~225 total | Active |
The profit factor of 0.93 tells the real story: when the Stochastic fires, the winning signals don’t outweigh the losers. Combined with a 34.2% win rate, this requires careful position sizing to be profitable.
Does the Stochastic Crossover Work on ETH?
The stochastic crossover struggled to generate meaningful edge on ETH over this 5-year period. With a -0.23 Sharpe ratio and 0.93 profit factor, the risk-adjusted returns are below what most systematic traders would consider acceptable.
This doesn’t mean the Stochastic is useless — it may work better on different assets, timeframes, or when combined with other filters. But on ETH with default parameters over 5 years, it didn’t produce a compelling standalone edge.
Our take: skip it on ETH unless you’re combining it with other confirmations or using it on different timeframes.
Data source: Yahoo Finance (yfinance). Backtest engine: backtrader. 95% position sizing. 0.1% commission per trade. Last refreshed: July 04, 2026. Not financial advice. Past performance does not guarantee future results.
Year-by-Year Breakdown
| Year | Return | Trades | Win Rate |
|---|---|---|---|
| 2021 | +67.5% | 20 | 34.2% |
| 2022 | -68.3% | 44 | 34.2% |
| 2023 | +90.0% | 45 | 34.2% |
| 2024 | +41.7% | 50 | 34.2% |
| 2025 | -11.5% | 42 | 34.2% |
| 2026 | -42.1% | 24 | 34.2% |
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