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Busted · DIA · 1D

Does MFI oversold bounce actually work? We tested it

We ran MFI oversold bounce through walk-forward testing and a 100-run random-entry gauntlet. Best showing 97 of 100 vs random on DIA, but only 7 trades in a decade. 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 97/100
Win rate 100.0%
Return +76.9%
Max drawdown −16.1%
Trades 7
Why it fails

Best showing 97 of 100 vs random on DIA, but only 7 trades in a decade. 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 +4.5% 0.67 1
2 Jul 2020 to Jul 2022 +25.6% 1.95 2
3 Jul 2022 to Jul 2024 +18.5% 1.52 3
4 Jul 2024 to Jul 2026 +12.1% 0.66 1
4 of 4 periods positive. Mean Sharpe 1.20. Worst period +4.5%.
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
DIA
97/100 NONE
AVGO
28/100 NONE
MSTR
18/100 NONE
XOM
n/a NONE
MARA
too new TOO NEW
GOOGL
too new TOO NEW
IWM
too new TOO NEW
QQQ
too new TOO NEW
NFLX
too new TOO NEW
HOOD
too new TOO NEW
SPY
too new TOO NEW
COIN
too new TOO NEW
SOFI
too new TOO NEW
RIOT
too new TOO NEW
AAPL
too new TOO NEW
UBER
too new TOO NEW
PLTR
too new TOO NEW
JPM
too new TOO NEW
AMD
too new TOO NEW
NVDA
too new TOO NEW
SMCI
too new TOO NEW
MU
too new TOO NEW
BA
too new TOO NEW
TSLA
too new TOO NEW
GLD
too new TOO NEW
AMZN
too new TOO NEW
META
too new TOO NEW
MSFT
too new TOO NEW
The rules
Entrywhen MFI of close over 14 bars crosses above 20 AND close is above SMA of close over 200 bars
Exitwhen a signal fires (MFI of close over 14 bars is above 80)
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.

Every verdict on this page comes from the same process. How we test.

Related setups

Busted RSI(14) oversold turn Busted Busted Bullish RSI divergence Busted Busted Golden cross Busted Busted Wilder DMI cross Busted
Do not take our word for it.

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