Reversal strategy: BB Low Breakdown on elevated volumelongBacktest Results @ PLTR • 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 4.8 years of PLTR • 1 Hour (Palantir Technologies Inc.) data, from September 30, 2020 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 4.8 years of PLTR • 1 Hour candles. This backtest resulted in 257 positions, with the average win rate of 29% and reward-risk ratio of 3.44. If you assume that 3.44 reward-to-risk ratio holds, you need a minimum win rate of 22.5 to be profitable. So you're looking good so far. The key metrics are as follows:
- Total Return: Total Return: 163.70% vs 1420.60% for the asset
- Max Drawdown: Max Drawdown: -33.30% vs -86.60% for the asset
- Exposure: Exposure: 25.00% time in the market
- Win Rate: Win Rate: 29.0%, vs 22.5% minimum
- Reward/Risk Ratio: Reward/Risk Ratio: 3.44
With that exposure in mind, you can tell that for 25% time-in-market, you get 11.52% of the asset upside potential, and 38.45% 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 @ PLTR • 1 Hour (163.7%) backtest results explained by Alex C
Alex C
AuthorThe strategy shows some interesting characteristics, but I see several red flags that needs attention. Most concerning is the high loosing rate of 71%. Even though the Risk/Reward ratio of 3.44 mathematically compensates for this, such a high loose rate can be psychologically challenging to handel in real trading.
The exposure of 25% is quite reasonable, and the average time in position of 7.2 candles suggests the strategy catches quick moves, which is good for reducing overnight risks. The win rate leeway of 28.77% above minimal required win rate is mathematically solid - this means the strategy has room for deterioration before it becomes unprofitable. However, the maximum drawdown of 33.3% is quite high for a strategy that is only exposed 25% of the time. This suggests the loosing streaks (maximum of 14 consecutive losses!) could be very painful to trade through.
While the total return of 163.7% over 4.8 years looks nice on paper, it severely underperforms the buy&hold return of 1420.6%. The low Sharpe ratio of 0.33 and negative Sortino ratio of -0.18 suggest the risk-adjusted returns are not optimal. I would recommend to work on reducing the loose rate, even if it means sacrificing some of the winning trade size. Maybe implementing a trailing stop loss could help catch more winners before they turn into loosers.
Tabular metrics of Reversal strategy: BB Low Breakdown on elevated volume backtested on PLTR • 1 Hour
| Total Trades | 257 | Net Profit | 163.7% | Buy & Hold Profit | 1420.6% |
| Win Rate | 29% | Reward/Risk Ratio | 3.44 | Max Drawdown | -33.3% |
| Asset Max Drawdown | -86.6% | Exposure | 25.0% | Avg Candles in Position | 7.2 |
| Sharpe Ratio | 0.33 | Sortino Ratio | -0.18 | Realized Volatility | 28.66% |
| Max Winning Streak | 3 | Avg Winning Streak | 1.5 | Max Losing Streak | 14 |
| Avg Losing Streak | 3.5 | Avg Trades per Month | 8.7 | Avg Trades per Day | 0.3 |
| Return Std Dev | 4.8 | Loss Std Dev | 1.6 | Win Std Dev | 6.0 |
| Expectancy | 0.3 | Beta | 0.16 |
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 |