Extreme risk: not investable
This strategy's worst historical drawdown is about -77%, a near-total loss from peak. It is published for research and illustration only. Nothing here is investment advice or a recommendation to buy, and you should not allocate capital you are not prepared to lose almost entirely.
For lower-risk, diversified strategies, browse the full catalog.
Buy the Dip at a glance
Buy the Dip is a tactical asset allocation (TAA) strategy by BestFolio across US Equity (3x Leveraged), Inverse Equity, Managed Futures, Gold (2x), rebalanced daily. Backtested 1985-10-08 to 2026-06-08 (40.7 years): 24.6% CAGR, 1.06 Sharpe, -76.5% max drawdown, 27.5% volatility.
- Type
- Tactical (TAA)
- Author
- BestFolio
- Rebalancing
- Daily
- Risk
- Aggressive
- Period
- 1985-10-08 to 2026-06-08
- CAGR
- 24.6%
- Sharpe
- 1.06
- Max Drawdown
- -76.5%
- Volatility
- 27.5%
Buy the Dip — Tactical Asset Allocation Strategy
Buy the Dip is a custom daily strategy designed for BestFolio that uses RSI and SMA indicators on QQQ with hysteresis-based state transitions to avoid whipsaw trades.
The strategy uses a state machine with three independent boolean flags — oversold, overheated, and momentum — each with separate entry and exit thresholds (hysteresis). This means the current state depends on the previous state, making the strategy path-dependent. The system walks through every trading day to compute the final state.
Backtest Performance (1985-10-08 to 2026-06-08)
| Metric | Buy the Dip |
|---|---|
| Compound Annual Growth Rate (CAGR) | 24.6% |
| Maximum Drawdown | -76.5% |
| Sharpe Ratio | 1.06 |
| Sortino Ratio | 1.12 |
| Annualized Volatility | 27.5% |
| Calmar Ratio | 0.32 |
| Total Return | 765208.0% |
| Backtest Period | 40.7 years |
Strategy Details
- Type
- Tactical (TAA)
- Rebalancing
- daily
- Risk Level
- aggressive
- Variants
- 1
- Author
- BestFolio
- Source
- Custom strategy by BestFolio (2024)
Asset Classes
- US Equity (3x Leveraged)
- Inverse Equity
- Managed Futures
- Gold (2x)
- Treasuries
- Low Volatility
Categories
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