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Mean reversion · MSFT · 1D

Does RSI(2) dip, MA exit actually work on MSFT? We tested it

We ran RSI(2) dip, MA exit on MSFT through walk-forward testing and a 100-run random-entry gauntlet. 3 of 4 unseen periods positive. Beat 98 of 100 random-entry runs.

WALK-FORWARD VERIFIED EDGESTACKER ENGINE
Return +99.0%
Win rate 77.3%
Max drawdown −13.6%
Trades 66
Sharpe 0.85
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 +25.2% 0.86 16
2 Jul 2020 to Jul 2022 +15.1% 1.06 17
3 Jul 2022 to Jul 2024 +12.1% 0.98 13
4 Jul 2024 to Jul 2026 −5.7% −0.63 9
3 of 4 periods positive. Mean Sharpe 0.57. Worst period −5.7%.
Market matrix
Edge held on 9 of 28

The same rules, tested on 28 tickers. Edge held on 9. We ship it on those.

MSFT SHIPPED
98/100 EDGE
NVDA
100/100 EDGE
MU
100/100 EDGE
AMD
99/100 EDGE
MSTR
96/100 EDGE
AVGO
94/100 EDGE
QQQ
86/100 EDGE
META
81/100 EDGE
SPY
80/100 EDGE
Show every ticker we tested
GLD
81/100 NONE
GOOGL
68/100 NONE
AAPL
66/100 NONE
DIA
60/100 NONE
BA
60/100 NONE
XOM
60/100 NONE
SMCI
50/100 NONE
TSLA
45/100 NONE
COIN
44/100 NONE
IWM
37/100 NONE
UBER
35/100 NONE
AMZN
34/100 NONE
NFLX
31/100 NONE
SOFI
30/100 NONE
MARA
30/100 NONE
RIOT
30/100 NONE
JPM
26/100 NONE
PLTR
too new TOO NEW
HOOD
too new TOO NEW
The rules
Entrywhen RSI of close over 2 bars is below 10 AND close is above SMA of close over 200 bars
Exitwhen a signal fires (close is above SMA of close over 5 bars)
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.
Diagnosis

This strategy made money, turning a 99% total return over 66 trades, and the ride was fairly steady with a high 77% win rate and an average gain of about 1% per trade. The worst hit was a sharp 13.58% drawdown that happened in just three days around March 2020, which lines up with a major market panic, so that was the only truly painful moment. The result is not driven by just a few lucky trades, because the consistency shows it was profitable in three out of four test periods, meaning the edge worked across different market conditions. The entry timing is extremely strong, as real entries beat 98% of random entry runs, so the signal for buying when RSI(2) dips below 10 while price is above the 200-day average is doing the heavy lifting here. Since the entry edge is so high, the exits are playing a supporting role, but they are still effective at locking in gains by selling when price closes above the 5-day average.

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