Strategy Thesis
RSI Snap-Back operates on a straightforward premise: the Magnificent Seven (AAPL, MSFT, NVDA, GOOGL, AMZN, META, TSLA) are followed so closely that violent short-term dislocations tend to correct quickly. The strategy enters a name when its RSI falls below 35 — signalling excessive selling pressure — and exits when RSI climbs above 70. A hard cap of four concurrent positions enforces concentration discipline and prevents the book from being overwhelmed during broad market selloffs.
The logic is sound in calm markets. High-liquidity mega-caps attract institutional dip-buying, and the RSI thresholds are conservative enough to filter noise. The 4-slot constraint is the strategy's most important risk lever: it limits correlated drawdown exposure when the whole sector reprices together.
Backtest Performance
Over 451 days of paper trading, RSI Snap-Back turned $10,000 into $12,095, a 20.95% total return and an 11.21% CAGR. Thirty-seven trades at a 66.67% win rate is a respectable hit ratio for a mean-reversion setup — two in three trades resolved in the strategy's favour.
The Sharpe of 0.61 is modest, reflecting the strategy's uneven return profile. Mean-reversion approaches earn in bursts during volatile periods and go quiet when trends are smooth or momentum is one-directional. The 23.73% max drawdown is the number that demands attention: at nearly 24 cents on the dollar, a live account would need real conviction to hold through the worst patch. That figure is consistent with a strategy that concentrates into four names that can all be tech-correlated at the worst moments.
Turnover at 773% annualised is high, which matters for a live implementation — though with $1 flat-fee trades totalling $37 in fees across the backtest period, transaction costs are not a material concern at the current paper-trading scale.
Recent Activity: Six Flat Sessions
The most notable recent signal is what hasn't happened. Daily scheduled runs from 1 June through 5 June all returned zero executions and zero rejections, with the full $10,000 sitting in cash. The book is empty.
This is not a malfunction — it is the strategy behaving exactly as designed. RSI Snap-Back only enters when a Mag-7 name falls to an oversold extreme. Six dormant sessions suggest that as of early June 2026, large-cap tech has not offered a qualifying entry: prices are either trending steadily or the RSI has not reached the sub-35 threshold. Patience is a feature, not a bug, in a mean-reversion framework.
Key Risks
Validation gap. The backtest record is the only performance evidence available; live validation data is marked null. Until the strategy executes real paper trades and those results are tracked separately, the backtest figures should be treated as hypothesis, not proof.
Concentrated tech correlation. Four slots across seven names means any broad tech selloff — a surprise macro print, a sector-wide earnings miss — can fill all four positions simultaneously and turn the max-drawdown scenario from theoretical to actual.
RSI regime sensitivity. In sustained trending markets, RSI can remain above 50 for months. The six-day cash streak hints at exactly this dynamic: the oscillator has not reset to oversold territory, leaving the strategy idle while a trend-following peer might be fully invested.
Bottom Line
RSI Snap-Back is a disciplined, mechanically clean strategy with a credible thesis and an encouraging backtest. The 23.73% drawdown and missing live-validation record are the two numbers to watch. The current cash-only posture reflects market conditions, not system failure — the next meaningful update will come when a Mag-7 name finally gives back enough ground to trigger a re-entry.