Does RSI(2) below 5 dip buy actually work on MSFT? We tested it
We ran RSI(2) below 5 dip buy on MSFT through walk-forward testing and a 100-run random-entry gauntlet. 4 of 4 unseen periods positive. Beat 92 of 100 random-entry runs.
You gave up raw return for a higher win rate and a shallower drawdown. This setup is about timing and staying out of trouble, not beating the index.
Equity curve over Aug 2016 to Jul 2026. Hover any point for its value. Turn on buy and hold to compare.
The same rules, tested on 28 tickers. Edge held on 10. We ship it on those.
Show every ticker we tested
This strategy made money overall, turning a 48.66% total return on Microsoft over 30 trades. The ride was fairly steady with a high 80% win rate, but it did have one painful stretch where the account dropped 11.43% from August 2019 to February 2020, which is where it hurt the most. The results are not driven by just a few lucky trades, as the average trade returned a solid 1.35% and the edge was consistent across all four test periods. The entry timing is doing most of the work here, since the real entries beat 92% of random entry runs, meaning the signal to buy when RSI(2) dips below 5 while the price is above the 200-day average is a strong trigger. Overall, this setup offers a reliable, repeatable edge with a manageable worst drawdown.
Every verdict on this page comes from the same process. How we test.
Bigger picture: Does buying the dip actually work?
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