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Busted · MSTR · 1D

Does Bullish RSI divergence actually work? We tested it

We ran Bullish RSI divergence through walk-forward testing and a 100-run random-entry gauntlet. Best showing 88 of 100 vs random on MSTR, but only 3 trades in a decade and just 2 of 4 periods positive. A high score on too few signals is a coin flip, not an edge, so it clears the bar on no ticker we ran it on.

BUSTED NO EDGE FOUND
Vs random 88/100
Win rate 100.0%
Return +17.1%
Max drawdown −6.5%
Trades 3
Why it fails

Best showing 88 of 100 vs random on MSTR, but only 3 trades in a decade and just 2 of 4 periods positive. A high score on too few signals is a coin flip, not an edge, so it clears the bar on no ticker we ran it on.

Equity curve

Equity curve over Aug 2016 to Jul 2026. Hover any point for its value. Turn on buy and hold to compare.

PeriodWindowReturnSharpeTrades
1 Aug 2018 to Jul 2020 n/a n/a 0
2 Jul 2020 to Jul 2022 n/a n/a 0
3 Jul 2022 to Jul 2024 +0.3% 0.07 1
4 Jul 2024 to Jul 2026 +16.0% 1.00 2
2 of 4 periods positive. Mean Sharpe 0.53. Worst period +0.3%.
Market matrix
Edge held on 0 of 28

The same rules on all 28 tickers. The entry never beats random timing by enough to call it an edge.

Show every ticker we tested
IWM
n/a NONE
PLTR
n/a NONE
MU
n/a NONE
SOFI
n/a NONE
MARA
n/a NONE
MSTR
too new TOO NEW
GOOGL
too new TOO NEW
QQQ
too new TOO NEW
AMD
too new TOO NEW
XOM
too new TOO NEW
COIN
too new TOO NEW
AAPL
too new TOO NEW
SMCI
too new TOO NEW
META
too new TOO NEW
AMZN
too new TOO NEW
UBER
too new TOO NEW
SPY
too new TOO NEW
HOOD
too new TOO NEW
BA
too new TOO NEW
MSFT
too new TOO NEW
NVDA
too new TOO NEW
GLD
too new TOO NEW
DIA
too new TOO NEW
RIOT
too new TOO NEW
TSLA
too new TOO NEW
JPM
too new TOO NEW
NFLX
too new TOO NEW
AVGO
too new TOO NEW
The rules
Entrywhen bullish RSI divergence is confirmed AND close is above SMA of close over 200 bars
Exitwhen a signal fires (close is at or above HIGHEST of close over 10 bars), or 15 bars have passed since entry (time stop)
Sizing**Position size:** no fixed stop distance to size against. This strategy exits on signal only. Size by conviction, or add a hard stop for a size-by-risk number.
Do not take our word for it.

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Backtested results, not live trading returns. Fees and slippage included. Not investment advice.