Backtest: Buy USO at the close when Brent crude falls more than 1.5% on the day but USO...
The setup sounds contrarian and disciplined: buy USO after a sharp Brent selloff, but only when the ETF refuses to break its prior-day low. In trade, the rule turned a profit — 12.40% on $100,000 across 51 closed trades. The catch: SPY returned 68.30% over the same stretch. The strategy trailed the benchmark by 55.90 points.
That gap frames the real question: does a defensive dip-buying system in oil actually beat doing nothing? The trade history says it made money, but just barely in relative terms. The win rate was 45.1%, so profits leaned on outsized winners like +13.23% against hard drawdowns like -11.45%. The charts and bar-by-bar breakdown below show where that edge — and its limit — actually lives.
Buy USO at the close when Brent crude falls more than 1.5% on the day but USO closes above its prior-day low; exit when USO closes below the entry-day low or after 5 trading days, whichever comes first.
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 USO at the close when Brent crude falls more than 1.5% on the day but USO closes above its prior-day low; exit when USO closes below the entry-day low or after 5 trading days, whichever comes first.
The key numbers
The charts
The takeaway
The strategy returned +12.40% on $100,000 starting capital across 51 closed trades with a 45% win rate. Over the same window SPY buy-and-hold returned +68.30%, so the strategy finished trailing the benchmark by 55.90 points. Best single trade +13.23%, worst -11.45%.
The fine print
- Simulated results on historical data — fills, slippage and costs are idealized.
- Past performance does not predict future results.