Title: Empirical analysis of moving averages strategy and buy-and-hold strategy in emerging markets: a comparative study

Authors: Rangapriya Saivasan; Madhavi Lokhande

Addresses: Welingkar Institute of Management, Bengaluru, India ' Welingkar Institute of Management, Bengaluru, India

Abstract: This study is highly relevant as practitioners constantly seek strategies for consistent and optimal returns. It compares the effectiveness of the 'buy-and-hold' strategy with an active trading strategy using 'exponential moving averages' (EMA) and 'displaced moving averages' (DMA). By examining Indian, Brazilian, and Indonesian indices from 2010 to 2022, the study finds that, overall, the buy-and-hold strategy outperforms the active trading strategy based on moving averages (EMA and DMA) across the studied economies. EMA-based strategies never outperformed the buy-and-hold approach, except for a marginal out performance of DMA-based active trading in India. These results support the efficient market hypothesis, favouring passive investing over active trading with technical analysis. Nonetheless, the effectiveness of moving averages in identifying market turns highlights their value as active tools for monitoring markets and mitigating risks. This research provides essential guidance to investors and practitioners for designing investment strategies and optimising outcomes.

Keywords: technical analysis; buy-hold strategy; displaced moving average; DMA; exponential moving averages; EMAs; emerging markets.

DOI: 10.1504/IJFMD.2025.151613

International Journal of Financial Markets and Derivatives, 2025 Vol.10 No.2, pp.135 - 154

Received: 28 Jun 2023
Accepted: 22 Jun 2024
Published online: 10 Feb 2026 *

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