Backtest: Buy LNG at the close when daily Iran/Hormuz/sanctions/tanker headline intensi...
Three trades. Two winners. A 66.7% win rate and a positive 14.79% return on capital — and yet the strategy still gave back more than half a benchmark's worth of performance to a simple buy-and-hold in SPY. That gap is the whole story. A 2% stop-loss and an 8-day holding window will filter out the losers, but they also cap the winners, and with only three closed trades the sample is too thin to call anything conclusive.
The test asked whether headline-driven scarcity premium in natural gas exports could be captured mechanically. The data says the setup did make money, but the cost of being picky was steep. The full backtest below breaks down each trade, the drawdown, and where the signal failed to keep pace.
Buy LNG at the close when daily Iran/Hormuz/sanctions/tanker headline intensity is in the top quartile of its prior-20-session distribution and LNG closes above its 50-day moving average; exit after 8 trading days or on a 2% stop-loss, whichever comes first. Hormuz disruption headlines raise the scarcity premium for non-OPEC gas exports, so LNG names that hold trend into the spike tend to stay bid for a week.
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 LNG at the close when daily Iran/Hormuz/sanctions/tanker headline intensity is in the top quartile of its prior-20-session distribution and LNG closes above its 50-day moving average; exit after 8 trading days or on a 2% stop-loss, whichever comes first. Hormuz disruption headlines raise the scarcity premium for non-OPEC gas exports, so LNG names that hold trend into the spike tend to stay bid for a week.
The key numbers
The charts
The takeaway
The strategy returned +14.79% on $100,000 starting capital across 3 closed trades with a 67% win rate. Over the same window SPY buy-and-hold returned +68.30%, so the strategy finished trailing the benchmark by 53.51 points. Best single trade +15.13%, worst -1.28%.
The fine print
- Simulated results on historical data — fills, slippage and costs are idealized.
- Past performance does not predict future results.
- Only 3 closed trades in the window — a small sample.