Does Three-down-days bounce actually work on MSFT? We tested it
We ran Three-down-days bounce on MSFT through walk-forward testing and a 100-run random-entry gauntlet. 3 of 4 unseen periods positive. Beat 99 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 6. We ship it on those.
Show every ticker we tested
This strategy made money overall, turning a 76% gain on Microsoft with a high win rate of nearly 78%, meaning most trades were winners. The ride was fairly steady, with a Sharpe ratio of 1.12 and a maximum drawdown of only -8.37%, which is quite mild. That worst drawdown happened from July 2024 to November 2025, so it was a long, slow grind lower rather than a sudden crash. The results are not driven by just a few lucky trades, because the entry timing is excellent, beating 99% of random entries, so the entry itself is carrying the result rather than the exits. The edge also shows up consistently across time, as the strategy was profitable in 3 out of 4 walk-forward test periods, so it is not a one-stretch wonder.
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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