Does Three-down-days bounce actually work on QQQ? We tested it

This strategy made money overall, turning a 45% gain on QQQ with a high win rate of 78%, meaning most of your trades were winners. The ride was fairly steady, as shown by a Sharpe ratio above 1.0 and a relatively shallow worst drawdown of just over 6%, which happened during a three-month stretch in the summer of 2019. That drawdown period was where the strategy hurt most, so you would have had to sit through a slow, losing patch without panicking. The entry timing is doing a lot of the heavy lifting here, since your real entries beat 86% of random entry dates, meaning the specific setup of buying after three down days above the 200-day average is a strong signal. The edge was also consistent, as the strategy was profitable in three out of four test periods, so the results are not just from one lucky streak.