Does Four-down-days bounce actually work on MSTR? We tested it
We ran Four-down-days bounce on MSTR through walk-forward testing and a 100-run random-entry gauntlet. 3 of 4 unseen periods positive. Beat 79 of 100 random-entry runs.
You gave up raw return for a higher win rate and a shallower drawdown. This setup is about timing and staying out of trouble, not beating the index.
Equity curve over Aug 2016 to Jul 2026. Hover any point for its value. Turn on buy and hold to compare.
The same rules, tested on 28 tickers. Edge held on 7. We ship it on those.
Show every ticker we tested
This strategy made money overall, returning 31.44% on 28 trades, and it had a high win rate of over 71%, meaning most trades were winners. However, the ride was very lumpy, as shown by a low Sharpe ratio of 0.41 and a brutal maximum drawdown of -18.37% that lasted nearly three years from mid-2021 to early 2024. That long drawdown period is where the strategy hurt most, and it suggests the setup went through a long stretch without working well. The entry timing does appear to carry some weight, since real entries beat 79% of random entry runs, so the specific signal of buying after four down days above the 200-day average added value. The consistency figure shows the edge was not steady, as the strategy was only profitable in 3 out of 4 test periods, meaning one losing period dragged down the overall result.
Every verdict on this page comes from the same process. How we test.
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