Trend pullback, backtested
"Buy the dip" is advice until you say which dip. This template makes it a rule: the stock has to be in a long-term uptrend first, the pullback has to reach the 50-day average, and the price has to turn back up through it before anything is bought, so a dip that keeps going is never bought at all. Unlike the crossover systems, this one is a complete trade: it carries a stop, a target, and a position size derived from them.
Over September 2021 to September 2026, this setup lost to simply buying and holding. €10,000 became €10,244 (+2.4%), against €24,147 (+141.5%) for buy & hold, over 6 trades, with a worst fall of 3.2%. That is a small enough number of trades that the result is an anecdote rather than evidence, however it reads.
The rules, exactly
This is what the run above loads. Every number in it stays editable: change the ticker, widen the stop, and run it again.
- The price must be above its 200-day average, the definition of an uptrend used here.
- Wait for a pullback to the 50-day EMA, then buy when the price closes back above it.
- Stop 1.5 ATR below the entry. That distance also sets the position size, at 1% of capital risked per trade.
- Take profit at 2R: twice the distance to the stop, and move the stop to breakeven once the trade is 1R in front.
Screens for: $2B+ · 1M+ shares a day · profitable. That filter does nothing on the single-stock run above. It is the pool this strategy is really meant to trade, and it comes into play when step 1 is switched from one ticker to the whole US stock market. The momentum screener is a free way to see a ranked pool like it today.
What to watch for
Risk-based sizing is what makes results across different stocks comparable, and it is also what makes this template's numbers unlike a simple buy-and-hold line: you are not always fully invested, so in a straight-up market it will trail simply holding. The 200/50 pair also defines an uptrend somewhat arbitrarily. Try a couple of the other numbers below before treating any single result as the strategy's real behaviour rather than one parameter set's luck.
Before you trust any backtest
A backtest is a measurement of the past under assumptions you chose, and the assumptions are where results go wrong. Three that matter here: the run covers five years of daily closes, so it has seen one bull market and one bad year rather than a full cycle; fees and slippage are included but your broker’s may differ; and a strategy that fired only a handful of times has told you almost nothing, however good the numbers look. The tool reports the trade count for that reason. Read it first.
Want to change the rules rather than the numbers? The full backtester builds a setup out of plain-English conditions, and this template arrives in it already loaded and editable.
The other prebuilt strategies
- Buy the dip: Buy any day that falls 2% or more, and sell ten trading days later. No filter, no stop.
- Golden Cross: Hold while the 50-day average is above the 200-day; step aside when it crosses back under.
- 20/50 cross: The same crossover idea as the golden cross, on faster averages: 20-day over 50-day.
- RSI 30/70: The textbook RSI trade: buy when the 14-day RSI drops under 30, sell when it clears 70.
- MACD crossover: Hold while the MACD line is above its signal line; go flat when it crosses back under.
- One-year high: Buy a close above the highest close of the past year; exit on a 50-day closing low.
- RSI-2 reversion: Buy an uptrending market when the 2-day RSI washes out below 10; sell the bounce above 70.
- Impulse pullback: A fresh 6/18 EMA cross marks a brand-new trend; buy its first small dip as it resumes.
- Donchian breakout: Buy a 20-day high the way the Turtles did; exit on a 10-day low or the 2R target.
- Bollinger reversion: Buy a close under the lower 20-day band; sell the snap back to the middle band.