Reversal strategy: BB Low Breakdown on elevated volumelongBacktest Results @ MSFT • 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 MSFT • 1 Hour (Microsoft Corporation) 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 MSFT • 1 Hour candles. This backtest resulted in 185 positions, with the average win rate of 23% and reward-risk ratio of 5.16. If you assume that 5.16 reward-to-risk ratio holds, you need a minimum win rate of 16.2 to be profitable. So you're looking good so far. The key metrics are as follows:
- Total Return: Total Return: 122.10% vs 250.00% for the asset
- Max Drawdown: Max Drawdown: -16.90% vs -38.20% for the asset
- Exposure: Exposure: 42.80% time in the market
- Win Rate: Win Rate: 23.0%, vs 16.2% minimum
- Reward/Risk Ratio: Reward/Risk Ratio: 5.16
With that exposure in mind, you can tell that for 43% time-in-market, you get 48.84% of the asset upside potential, and 44.24% 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 @ MSFT • 1 Hour (122.1%) backtest results explained by Mike, Sarah
Mike
AuthorYo fam, this MSFT strategy is looking pretty interesting! 🚀 While it's not beating buy & hold (122% vs 250%), there's some juicy stuff under the hood that got me hyped.
Check this out - we're only winning 23% of trades but still making bank! That's because when we win, we win BIG (5.85% average wins vs -1.13% losses). That's like working at Wendy's but hitting those occasional option plays that make your whole month! The strategy's got a solid 5.16 risk/reward ratio, which is straight fire 🔥, and we're way above the minimum win rate needed (16.2%).
What I really dig is the max drawdown of -16.9% compared to MSFT's -38.2%. That means we're not getting completely rekt during rough times. Plus, we're only in the market 42.8% of the time, so we're not constantly exposed to risk like those diamond hands HODLers. The only thing that makes me a bit nervous is those 11-trade losing streaks - gotta have strong hands to handle that kind of pressure! 💎✋
Not financial advice, but if I was trading this with my Wendy's money, I'd be pretty stoked about those risk metrics and might even consider sizing up a bit! 🍗
Sarah
AuthorDios mío, this strategy is a complete disaster! Let me tell you why you should throw this piece of garbage directly to papelera.
First, a 23% win rate? Are you kidding me? You're basically losing 8 out of 10 trades! Yes, I see your fancy "Win Rate Leeway" calculations, but in real life, losing this much will destroy your psychology. And that 11-trade losing streak? Madre mía, that would make even the most patient trader jump out of the window!
The only thing keeping this strategy alive is the ridiculously high risk/reward ratio of 5.16. But let's be honest - in real market conditions, you won't get those 5.85% winners as easily as in your backtest. The market isn't so generous, especialy with MSFT.
Looking at the performance metrics - yes, you made 122% over 5.7 years, but Buy & Hold doubled that with 250%! You're basicaly making things more complicated just to perform worse than if you had simply bought and forgotten about it. That's what we call in Spain "más tonto que un zapato"!
The only positive thing I can say is that your risk management seems decent with that -16.9% max drawdown. But honestly, with such poor win rate and market exposure of only 42.8%, you're better off finding a completely different strategy or just sticking to Buy & Hold.
Tabular metrics of Reversal strategy: BB Low Breakdown on elevated volume backtested on MSFT • 1 Hour
| Total Trades | 185 | Net Profit | 122.1% | Buy & Hold Profit | 250.0% |
| Win Rate | 23% | Reward/Risk Ratio | 5.16 | Max Drawdown | -16.9% |
| Asset Max Drawdown | -38.2% | Exposure | 42.8% | Avg Candles in Position | 22.1 |
| Sharpe Ratio | 0.84 | Sortino Ratio | 1.17 | Realized Volatility | 16.45% |
| Max Winning Streak | 3 | Avg Winning Streak | 1.2 | Max Losing Streak | 11 |
| Avg Losing Streak | 3.9 | Avg Trades per Month | 5.3 | Avg Trades per Day | 0.2 |
| Return Std Dev | 3.5 | Loss Std Dev | 0.7 | Win Std Dev | 3.7 |
| Expectancy | 0.4 | Beta | 0.35 |
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 |