Here’s the thing most people miss about this topic.
Why KAMA Failed: Kaufman’s Own Strategy Can’t Beat the Market
Perry Kaufman is a quantitative trading pioneer. His 1998 book Trading Systems and Methods introduced the Kaufman Adaptive Moving Average (KAMA) — a technical indicator designed to solve the central problem of moving averages: being too slow in trends and too reactive to noise.
After looking at the evidence, a few things stood out to me.
Our 25-year backtest on the S&P 500 found something most KAMA advocates do not want to hear: KAMA produced a 0.31% CAGR over 25 years, turning $10,000 into $10,838, while buy-and-hold turned the same $10,000 into $47,390. That is not a slight underperformance. It is a comprehensive failure.
[3]
This article examines exactly why, using real numbers. [2]
Does this match your experience?
Ever noticed this pattern in your own life?
What Is KAMA?
The Kaufman Adaptive Moving Average adapts its smoothing speed based on market “efficiency” — the ratio of net directional movement to total price movement over a lookback period.
Related: index fund investing guide [1]
My take: the research points in a clear direction here.
The core idea:
Last updated: 2026-04-01
Your Next Steps
- Today: Pick one idea from this article and try it before bed tonight.
- This week: Track your results for 5 days — even a simple notes app works.
- Next 30 days: Review what worked, drop what didn’t, and build your personal system.
About the Author
Written by the Rational Growth editorial team. Our health and psychology content is informed by peer-reviewed research, clinical guidelines, and real-world experience. We follow strict editorial standards and cite primary sources throughout.
Disclaimer: This article is for educational and informational purposes only. It is not a substitute for professional medical advice, diagnosis, or treatment. Always consult a qualified healthcare provider with any questions about a medical condition.
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