Backtest: Buy EQT at the close when its 5-day total return is below -5% and its daily v...
A 5-day drop of more than 5% in EQT, on volume in the top quintile of the last 20 sessions — the idea is that forced selling from fast-money energy longs has run its course, and the stock snaps back. Capitulation, then mean reversion. This backtest puts that premise to the test, entering at the close and exiting on a close back above the 5-day moving average, or after eight trading days.
The result is a profitable strategy that still lost to the tape. Across 17 closed trades: 16.78% return on 100k starting capital, 58.8% win rate, best trade +9.78%, worst -3.26%. But over the same window, buy-and-hold SPY returned 68.30%, a 51.52-point gap that matters more than the raw P&L.
The full analysis below breaks down the equity curve, the signal timing, and where the strategy made and gave back money — and whether the edge, such as it is, survives a closer look.
Buy EQT at the close when its 5-day total return is below -5% and its daily volume is in the top quintile of the prior 20 sessions; exit when EQT closes above its 5-day simple moving average or after 8 trading days, whichever comes first. A high-volume, short-term washout in the gas-heavy producer marks capitulation from fast-money energy longs, and the stock tends to mean-revert once forced selling exhausts.
How this was measured
This is a simulated backtest generated from the plain-English strategy below, executed bar-by-bar on historical market data using the price + news data mode with $100,000 starting capital. Strategy: Buy EQT at the close when its 5-day total return is below -5% and its daily volume is in the top quintile of the prior 20 sessions; exit when EQT closes above its 5-day simple moving average or after 8 trading days, whichever comes first. A high-volume, short-term washout in the gas-heavy producer marks capitulation from fast-money energy longs, and the stock tends to mean-revert once forced selling exhausts.
The key numbers
The charts
The takeaway
The strategy returned +16.78% on $100,000 starting capital across 17 closed trades with a 59% win rate. Over the same window SPY buy-and-hold returned +68.30%, so the strategy finished trailing the benchmark by 51.52 points. Best single trade +9.78%, worst -3.26%.
The fine print
- Simulated results on historical data — fills, slippage and costs are idealized.
- Past performance does not predict future results.