Thesis
channel-pullback is a mean-reversion-within-trend strategy: it buys pullbacks toward the lower regression channel or volume support inside confirmed uptrends, then exits at the upper channel or resistance. The design makes a specific bet — that dips in strong names are opportunities, not reversals — and it trades a 24-name large-cap universe spanning tech, financials, healthcare, staples, and energy (AAPL, MSFT, NVDA, JPM, V, JNJ, PG, XOM, and others).
Recent activity
The strategy is live and running on a daily schedule. Over the past two weeks it has been active but modest: single-name rotations in AAPL and NVDA dominate. It bought 5 AAPL at $344.51 on 2026-10-28, a day after selling 5 at $347.14 — a quick in-and-out consistent with the pullback-and-exit logic. Earlier it round-tripped NVDA (bought 9 at $220.45, sold at $220.92, re-bought at $211.74) and trimmed staples/healthcare (KO, PFE, JNJ). Scheduled runs show light touch: most days execute zero to two trades with no rejections. Portfolio total sits near $11,053, up from the ~$10,762 backtest final equity, so live results are at least directionally consistent.
Backtest performance
Over 451 days the backtest returns +7.62% (4.19% CAGR), with a 0.40 Sharpe and a 14.83% max drawdown. The win rate is only 39.39% across 137 trades — but a positive return on a sub-50% hit rate tells you the winners are bigger than the losers, a classic trend-following signature. Less flattering is turnover of 2,311%: this strategy churns, and while modeled fees are light ($137 total, no FX cost), real-world slippage on that volume would bite harder than the backtest assumes.
Validation — the sticking point
This is where the picture turns cautious. The strategy fails our walk-forward gate. On the surface it looks decent — three of four folds are positive, out-of-sample return is +3.63% with a 0.74 OOS Sharpe. But the folds are wildly inconsistent: fold 3 (Jul–Dec 2025) returns +20.68% at a 3.86 Sharpe, while fold 2 (Jan–Jul 2025) loses 11.42% at a −1.70 Sharpe and a 16% drawdown. That dispersion is the tell. After deflating for 7 trials, the Deflated Sharpe Ratio collapses to 0.196 (PSR 0.702), which is why the gate rejects it. In plain terms: the headline edge is plausibly a product of regime luck and selection, not a robust, repeatable signal.
Verdict
Strengths: a coherent, well-defined thesis; asymmetric winners that overcome a low hit rate; controlled fold-3 drawdowns; and live behaviour that tracks the backtest so far. Risks: heavy turnover, a 39% win rate that demands discipline on exits, regime fragility (fold 2 was ugly), and — most important — a failed validation with a near-zero deflated Sharpe. channel-pullback is worth watching live, but the numbers do not yet support treating its edge as proven. Keep it on a short leash and judge it by whether it survives the next adverse regime, not by the 2025 tailwind.