Reversal strategy: BB Low Breakdown on elevated volumelongBacktest Results @ META • 1 Hour
This intraday reversal strategy seeks to enter once price breaks down the Bollinger Bands low, while RSI signaling oversold and while trading volume is above the average. It also never enters on the last candle of a day. It exits once RSI signals oversold, while also having a take profit and a stop loss.
Equity Curve
Backtest covers 5.7 years of META • 1 Hour (Meta Platforms, Inc.) data, from November 15, 2019 to August 1, 2025.
Equity curve is the strategy's performance over time. You should compare it to the asset's Buy & Hold performance. In general, you want the blue area to be well above the gray area.
Drawdown is how much losses (realized or unrealized) the strategy has had if compared to the highest equity peak. Compare this to the asset's drawdown to see whether your strategy does a decent job of isolating you from downside volatility. In general, the red area must be well within the gray area.
So, we have backtested Reversal strategy: BB Low Breakdown on elevated volume on 5.7 years of META • 1 Hour candles. This backtest resulted in 205 positions, with the average win rate of 23% and reward-risk ratio of 5.44. If you assume that 5.44 reward-to-risk ratio holds, you need a minimum win rate of 15.5 to be profitable. So you're looking good so far. The key metrics are as follows:
- Total Return: Total Return: 181.70% vs 283.50% for the asset
- Max Drawdown: Max Drawdown: -27.40% vs -76.80% for the asset
- Exposure: Exposure: 35.70% time in the market
- Win Rate: Win Rate: 23.0%, vs 15.5% minimum
- Reward/Risk Ratio: Reward/Risk Ratio: 5.44
With that exposure in mind, you can tell that for 36% time-in-market, you get 64.09% of the asset upside potential, and 35.68% of the asset downside potential.
Reversal strategy: BB Low Breakdown on elevated volume: enter a position when
All of the following: # "Romeo"
60min Chart(low) < 60min Bollinger Bands ® (20, 2, 2, 0, close), Low
60min Relative Strength Index (14, 70, 30, close) < 35
60min Volume (20, SMA), Vol. > 60min Volume (20, SMA), MA
None of the following:
60min Candle Time = 1530Reversal strategy: BB Low Breakdown on elevated volume: exit a position when
Any of the following: 60min Relative Strength Index (14, 70, 30, close) > 80
Exit if lost more than 1% (after candle closes).
Exit if gained more than 10% (after candle closes).
Exit after 100 candles, for any PnL.
Reversal strategy: BB Low Breakdown on elevated volume @ META • 1 Hour (181.7%) backtest results explained by Alex C, Mike, Sarah
Alex C
AuthorThe strategy shows some interesting characteristics, but I have concerns about its real-world application. The win rate of 23% is quite low, even though it's mathematically viable due to the good risk-reward ratio of 5.44. However, this creates a psychological challange - can you handle losing 19 trades in row? This is not theoretical, the backtest shows it happened.
The strategy's exposure to market is 35.7%, which means it stays in cash most of the time. This is actually good for risk management, but the maximum drawdown of 27.4% is still significant. The Sharpe ratio of 0.54 is below what I would consider acceptable - I typically look for at least 1.0. The low Sortino ratio of 0.25 suggests the strategy struggles with downside volatility.
What worries me most is the degrading performance over time periods. While 1M and 3M returns look impressive, the yearly performance drops significantly. This could indicate the strategy is becoming less effective over time or might be over-optimized for recent data. I would suggest running more tests with different timeframes and maybe adjusting the RSI parameters, which seem quite extreme (35 to 80 range).
Mike
AuthorYo fam, this META strategy is kinda fire but also wild AF! 🔥 The numbers are actually pretty interesting for a reversal play.
Looking at that 23% win rate might scare some paper hands, but check this out - when it wins, it wins BIG (6.64% average wins vs -1.22% losses). That's like getting tendies from behind the Wendy's dumpster! 🚀 The strategy's got a solid 22.84% cushion above the minimum win rate needed to be profitable, which is straight-up bussin'.
The thing that's got me hyped is how it's actually protecting our gains with that 35.7% market exposure - meaning we're not YOLOing our entire portfolio all the time. That -27.4% max drawdown is way better than META's own -76.8% drawdown, so we're actually managing risk pretty well here. The strategy might not beat buy & hold (181.7% vs 283.5%), but it's doing it with way less risk exposure and that's what I call playing smart! 💎🙌
Not financial advice, but I'd definitely consider this for my Wendy's paycheck portfolio. Just gotta be ready for those losing streaks (up to 19 in a row, oof) and stay diamond-handed through the rough patches! 📈
Sarah
AuthorDios mío, this strategy is like watching a drunk person trying to dance salsa! The win rate of 23% is pathetically low - you're basically losing 3 out of 4 trades! And that 19-trade losing streak? ¡Qué desastre!
Look, I know you're trying to be clever with that 5.44 risk/reward ratio, but let's be honest - this is just gambling with extra steps. Your strategy underperforms buy & hold by more than 100% (181.7% vs 283.5%). That's embarassing! And that -27.4% drawdown? Your account will look like a rollercoaster gone wrong!
The only somewhat decent thing here is the win rate leeway being above minimal required - but that's like saying "hey, at least the Titanic had nice furniture!" The market exposure of 35.7% suggests you're missing most of the actual moves while probably catching many false signals. And those Sharpe and Sortino ratios? They're so low they make a snail look fast.
Do yourself a favor - either completely rebuild this strategy or throw it in the trash where it belongs. This is not trading, this is just sophisticated way to lose money slower than usual.
Tabular metrics of Reversal strategy: BB Low Breakdown on elevated volume backtested on META • 1 Hour
| Total Trades | 205 | Net Profit | 181.7% | Buy & Hold Profit | 283.5% |
| Win Rate | 23% | Reward/Risk Ratio | 5.44 | Max Drawdown | -27.4% |
| Asset Max Drawdown | -76.8% | Exposure | 35.7% | Avg Candles in Position | 16.4 |
| Sharpe Ratio | 0.54 | Sortino Ratio | 0.25 | Realized Volatility | 19.14% |
| Max Winning Streak | 3 | Avg Winning Streak | 1.2 | Max Losing Streak | 19 |
| Avg Losing Streak | 4.2 | Avg Trades per Month | 5.9 | Avg Trades per Day | 0.2 |
| Return Std Dev | 4.0 | Loss Std Dev | 0.7 | Win Std Dev | 4.5 |
| Expectancy | 0.5 | Beta | 0.23 |
All backtests for Reversal strategy: BB Low Breakdown on elevated volume
| backtest | exposure | peformance vs asset | drawdown vs asset | win% | reward/risk |
|---|---|---|---|---|---|
META • 10 Minutes | 55% | (64.3%/53.3%) 1.21x | (-22.5%/-35.1%) 0.64x | 32 | 3.3 |
MSFT • 10 Minutes | 58% | (46.3%/18.1%) 2.56x | (-21.4%/-23.9%) 0.90x | 45 | 1.9 |
NVDA • 10 Minutes | 55% | (7.9%/41.7%) 0.19x | (-40.0%/-42.8%) 0.93x | 26 | 3.1 |
PLTR • 10 Minutes | 50% | (142.4%/439.0%) 0.32x | (-25.7%/-46.5%) 0.55x | 26 | 4.3 |
SPY • 10 Minutes | 64% | (13.5%/12.3%) 1.10x | (-12.7%/-20.7%) 0.61x | 47 | 1.4 |
TSLA • 10 Minutes | 55% | (-2.1%/23.0%) -0.09x | (-42.1%/-55.3%) 0.76x | 20 | 4.2 |
META • 30 Minutes | 46% | (291.9%/356.0%) 0.82x | (-23.6%/-51.8%) 0.46x | 25 | 6.0 |
MSFT • 30 Minutes | 46% | (75.9%/103.5%) 0.73x | (-19.8%/-26.6%) 0.74x | 27 | 4.2 |
NVDA • 30 Minutes | 43% | (925.3%/1089.5%) 0.85x | (-34.1%/-42.9%) 0.79x | 28 | 5.7 |
PLTR • 30 Minutes | 32% | (101.6%/1516.1%) 0.07x | (-28.8%/-48.4%) 0.60x | 23 | 4.5 |
SPY • 30 Minutes | 52% | (60.8%/65.6%) 0.93x | (-12.9%/-20.2%) 0.64x | 35 | 3.0 |
TSLA • 30 Minutes | 37% | (-6.4%/33.8%) -0.19x | (-43.8%/-67.1%) 0.65x | 20 | 4.3 |
META • 1 Hour | 36% | (181.7%/283.5%) 0.64x | (-27.4%/-76.8%) 0.36x | 23 | 5.4 |
MSFT • 1 Hour | 43% | (122.1%/250.0%) 0.49x | (-16.9%/-38.2%) 0.44x | 23 | 5.2 |
NVDA • 1 Hour | 25% | (106.1%/3270.7%) 0.03x | (-44.6%/-68.0%) 0.66x | 23 | 4.3 |
PLTR • 1 Hour | 25% | (163.7%/1420.6%) 0.12x | (-33.3%/-86.6%) 0.38x | 29 | 3.4 |
SPY • 1 Hour | 56% | (89.3%/99.7%) 0.90x | (-27.1%/-35.1%) 0.77x | 28 | 3.8 |
TSLA • 1 Hour | 26% | (-39.1%/1194.5%) -0.03x | (-64.5%/-75.1%) 0.86x | 22 | 3.4 |