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Your idea: Backtest this strategy exactly as written. This is a LONG-ONLY SPOT st…
💡 Described strategy
Analysed 23 Sep 2026, 04:13 AM IST
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Heads up: this strategy was originally created for
the US stock market.
We applied the exact same logic to Indian stocks & indices and the backtest completed successfully —
every result below is on Indian market data.
Why 1.0/5? (stars grade the EDGE — per-trade expectancy, consistency, drawdown — not the headline return)
- ✕ Negative expectancy: -0.24R per trade across 28,458 trades
- ✕ Payoff 0.60 — the average winner is SMALLER than the average loser
- ✕ 9 of 9 tested years were negative (2018, 2019, 2020, 2021) — the edge is regime-dependent
Detected components (auto-read from transcript)
Verdict
Auto-backtested. AI-decoded: Previous-day range revisit with swing-level confirmation, hammer, and FVG on 5-min crypto and US equities; core mechanic is PDH/PDL level retesting with reversal confirmation. We isolated the one mechanical claim — a day-of-week bias where a prior session's level is expected to be 'revisited'/swept — and traded it short across 159 large/mid-caps with real costs: 28,458 trades, win 49%, expectancy -0.24R/trade (avg -0.24%/trade).
The result is a high win-rate that still loses money after costs — a negative-skew mirage: small targets, larger adverse moves. A directional lean can be statistically real yet still fail to pay once you attach a target, a stop and costs.
Mechanically decoded and scored from the metrics. Flagged for human review.
Is it profitable? (green above the line = made money, red below = lost it)
Year by year (every trade the rules fired, across the tested stocks)
| Year | Trades | Win % | Expectancy | Avg return / trade |
|---|---|---|---|---|
| 2018 | 1715 | 47% | -0.21R | -0.26% |
| 2019 | 3467 | 50% | -0.22R | -0.21% |
| 2020 | 3227 | 48% | -0.05R | -0.11% |
| 2021 | 3380 | 49% | -0.30R | -0.33% |
| 2022 | 3842 | 58% | -0.06R | -0.10% |
| 2023 | 3642 | 41% | -0.41R | -0.34% |
| 2024 | 3521 | 42% | -0.37R | -0.34% |
| 2025 | 4033 | 49% | -0.30R | -0.26% |
| 2026 | 1631 | 56% | -0.15R | -0.17% |
Where this strategy made & lost money (the full stock-by-stock breakdown — 158 stocks, incl. 2026)
| # | Stock | Trades | Win% | Avg/trade | Best | Total | 2026 |
|---|---|---|---|---|---|---|---|
| 1 | ████████ | 188 | 52% | -0.1% | +6% | -16% | +6% |
| 2 | ████████ | 179 | 49% | -0.3% | +7% | -47% | +5% |
| 3 | ████████ | 192 | 53% | -0.1% | +6% | -13% | +4% |
| 4 | ████████ | 56 | 57% | -0.3% | +2% | -15% | +4% |
| 5 | ████████ | 189 | 48% | -0.2% | +10% | -46% | +4% |
| 6 | ████████ | 192 | 42% | -0.3% | +9% | -59% | +4% |
| 7 | ████████ | 150 | 43% | -0.5% | +4% | -76% | +4% |
| 8 | IDFCFIRSTB free peek | 179 | 53% | -0.0% | +11% | -8% | +3% |
| 9 | ████████ | 182 | 52% | -0.1% | +9% | -10% | +3% |
| 10 | ████████ | 178 | 54% | -0.1% | +3% | -9% | +2% |
| 11 | ████████ | 192 | 51% | -0.1% | +7% | -14% | +2% |
| 12 | ████████ | 105 | 51% | -0.2% | +5% | -22% | +2% |
| 13 | ████████ | 187 | 50% | -0.2% | +3% | -39% | +2% |
| 14 | ████████ | 175 | 49% | -0.2% | +3% | -40% | +2% |
| 15 | ████████ | 188 | 49% | -0.2% | +4% | -44% | +2% |
| 16 | ████████ | 170 | 50% | -0.3% | +3% | -46% | +2% |
| 17 | ████████ | 179 | 51% | -0.3% | +5% | -46% | +2% |
| 18 | ████████ | 183 | 50% | -0.3% | +6% | -47% | +2% |
| 19 | ████████ | 165 | 45% | -0.3% | +2% | -49% | +2% |
| 20 | ████████ | 188 | 49% | -0.3% | +3% | -51% | +2% |
| 21 | ████████ | 190 | 50% | -0.4% | +3% | -70% | -13% |
| 22 | ████████ | 186 | 42% | -0.3% | +10% | -60% | -9% |
| 23 | ████████ | 188 | 47% | -0.3% | +3% | -56% | -9% |
| 24 | ████████ | 186 | 53% | -0.1% | +13% | -25% | -9% |
| 25 | ████████ | 188 | 43% | -0.3% | +8% | -48% | -8% |
| 26 | ████████ | 183 | 50% | -0.2% | +11% | -37% | -8% |
| 27 | ████████ | 180 | 48% | -0.2% | +7% | -32% | -8% |
| 28 | ████████ | 185 | 43% | -0.4% | +3% | -73% | -7% |
| 29 | ████████ | 151 | 48% | -0.3% | +3% | -48% | -7% |
| 30 | ████████ | 206 | 44% | -0.2% | +6% | -43% | -7% |
You can see the numbers — see the names.
Unlock every stock in this breakdown and download it as Excel.
The worst stock in this table returned -76% under these
exact rules — one wrong pick costs many times the unlock.
Educational backtest output only — not investment advice or a recommendation to buy/sell any security. AI-generated from stored historical data; not 100% accurate. Past performance is not indicative of future results.
On the index (same rules applied to NIFTY & BANKNIFTY)
| Index | Trades | Win% | Expectancy (R/trade) | Avg return/trade |
|---|---|---|---|---|
| NIFTY | 247 | 36% | -0.52R | -0.19% |
| BANKNIFTY | 259 | 44% | -0.42R | -0.18% |
Full transcript (693 words)
Backtest this strategy exactly as written. This is a LONG-ONLY SPOT strategy. Do NOT open short positions. When the rules say SELL, that means exit an existing long spot position. IMPORTANT: * This strategy must be mechanically backtested. * Do not replace, simplify, or reinterpret any rule. * Do not add indicators or filters that I did not specify. * Do not optimize parameters. * Use the exact definitions below. * Report every rule used in the backtest and clearly state any data limitation. * Use realistic commissions and slippage for the tested market. * Test every qualifying signal, not selected examples. # MARKET / TIMEFRAME Primary timeframe: 5-minute candles. Test on: 1. BTC/USDT spot 2. ETH/USDT spot 3. NVDA 4. AAPL 5. SPUS 6. SPTE For stocks and ETFs, use regular U.S. market hours unless the historical dataset specifically supports extended hours. For crypto, use continuous 24/7 data. # 1. PREVIOUS-DAY RANGE For every trading day, calculate: Previous Day High (PDH) = highest high of the immediately preceding completed trading day. Previous Day Low (PDL) = lowest low of the immediately preceding completed trading day. These levels remain FIXED throughout the current trading day. PDH and PDL are called the "Range High" and "Range Low". Do not move these levels during the day. # 2. SWING HIGH AND SWING LOW Starting from the previous completed day and looking further back in historical price data, identify the nearest confirmed significant swing high above the Previous Day High and the nearest confirmed significant swing low below the Previous Day Low. Use this objective definition: Swing High: A candle whose high is greater than or equal to the highs of the 3 candles immediately before it and the 3 candles immediately after it. Swing Low: A candle whose low is less than or equal to the lows of the 3 candles immediately before it and the 3 candles immediately after it. A swing must be CONFIRMED before it can be used. Search backwards through historical data until the nearest qualifying swing high ABOVE PDH and nearest qualifying swing low BELOW PDL are found. Call these: * Swing High * Swing Low Keep these structural levels fixed for the current trading day. # 3. IMPORTANT PRICE ZONES There are four important levels: 1. Range Low = Previous Day Low 2. Swing Low = nearest confirmed swing low below Range Low 3. Range High = Previous Day High 4. Swing High = nearest confirmed swing high above Range High LOWER BUY ZONE: * Range Low * Swing Low UPPER SELL ZONE: * Range High * Swing High Price does NOT have to hit the exact tick of the level. Define a level as "touched" when the 5-minute candle's high/low comes within 0.10 ATR(14) of that level or trades through the level. # 4. ATR CONFIRMATION Calculate ATR(14) on the 5-minute timeframe. ATR must be used as a volatility/confirmation filter. Do NOT enter immediately when price touches Range Low or Swing Low. After price touches a lower level, require the reversal candle to have a total range of at least 0.50 x the current 5-minute ATR(14). For a bullish reversal: candle range = high - low candle range must be >= 0.50 x ATR(14) For a bearish reversal used for exiting: candle range must also be >= 0.50 x ATR(14) # 5. HAMMER CONFIRMATION FOR LONG ENTRY After price touches either: * Range Low, OR * Swing Low look for a bullish reversal confirmation. A valid HAMMER must satisfy: 1. Lower wick >= 2.0 x candle body 2. Upper wick <= candle body 3. Candle closes above its open OR closes in the upper 50% of its total range 4. Candle range >= 0.50 x ATR(14) Body = abs(close - open) Upper wick = high - max(open, close) Lower wick = min(open, close) - low Range = high - low The hammer must occur after price has touched the lower buy zone. # 6. BULLISH FVG CONFIRMATION After a lower-zone touch, require a bullish Fair Value Gap. Use the standard 3-candle definition: Bullish FVG exists when: Candle 3 low > Candle 1 high The gap is: Candle 1
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