The thesis
RSI Snap-Back is a mean-reversion play on the Mag-7 universe — AAPL, MSFT, NVDA, GOOGL, AMZN, META, and TSLA. The premise is straightforward: large-cap tech tends to overshoot on short-term momentum and then snap back. The strategy buys the most oversold names on an RSI reading below 35, exits when RSI pushes above 70, and rotates to keep a tight four-name book. That hard 4-slot cap is the discipline mechanism — it caps concurrent exposure and forces the strategy to concentrate only on its strongest reversion candidates.
It's a clean, legible idea, and legibility is a virtue in a systematic book: you can reason about exactly why any position exists.
Backtest performance
Over a 451-day backtest, the strategy returned 20.95%, growing a $10,000 book to $12,095, for a CAGR of 11.21%. The win rate was a healthy 66.67% across 37 trades, and total fees came to just $37 with no FX cost.
The less flattering numbers sit alongside those. The Sharpe ratio of 0.61 is modest — respectable but not exceptional for the risk taken. The maximum drawdown of 23.73% is steep, meaning the equity curve was not a smooth ride even as it trended up. And turnover of 773% is high: this is an active rotation strategy, and while fees stayed low in the backtest, that pace of churn is worth watching as a slippage and execution risk in live conditions.
Recent live activity
Here's the tension. The strategy is marked live, but its last six scheduled runs — from July 7 through July 14 — each report the same line: 0 executed, 0 rejected, cash $10,000, total $10,000. In other words, it has been sitting entirely in cash, finding nothing to buy. No entry signals have fired.
That isn't a malfunction — it's the strategy behaving as designed. With no Mag-7 name dipping below the RSI-35 threshold, the book stays empty rather than forcing trades. Discipline is doing its job. But it also means the live track record is, so far, a flat line, and none of the backtested edge has yet been demonstrated in production.
Strengths and risks
Strengths: a coherent, well-understood thesis; a strong backtested win rate; low direct trading costs; and a hard position cap that enforces risk discipline.
Risks: The single biggest gap is that validation is null — there is no out-of-sample or walk-forward test on record. Combined with 773% turnover, that raises a legitimate overfitting question: a 37-trade sample is thin, and a strategy tuned tightly to one 451-day window can flatter itself. The 23.73% drawdown warns that patience will be tested.
Verdict: an appealing idea with a decent backtest and a quiet live start. Until it puts real trades on the board and earns an out-of-sample check, treat the 20.95% as a hypothesis, not a result.