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Finaxion Research · Bounce off the lower Bollinger band · single stocks · Recomputed 2026-09-10

Does Bounce off the lower Bollinger band work on FDS?

Bounce off the lower Bollinger band does not beat buy-and-hold on FDS: -13.8 points a year over 30 years.

Total return
100.2%
Buy and hold
×92
CAGR
2.3%
Sharpe
-0.02
Max drawdown
-52.9%
Trades
246
Out of sample
overfit
Years
30
1×10×100×140×1997200020032006200920122015201820212024
StrategyFDS

Findings

  1. Bounce off the lower Bollinger band does not beat buy-and-hold on FDS: -13.8 points a year over 30 years.
  2. Against the S&P 500 over the same window: -8.0 points a year.
  3. Total return +100.2% versus ×92 for buy-and-hold, with 246 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -52.9%.
  6. It beats in neither half of the history (split at 2011).
  7. It ranks #94 of 235 markets for this strategy by annual excess over the S&P 500.

Findings derived from the full panel. Each carries its number and its denominator; the computations are reproducible with artifact 30497848a621.

Exactly what was tested

Close crosses back above the lower band (20, 2σ) after piercing it → entry. Close reaches the 20-day mean → exit.

How to read it

The verdict compares the strategy with buying and holding FDS over the same window, with round-trip costs per asset class. “Out of sample” is walk-forward: the rule is fit on one stretch and judged on the next. A result that beats in the full sample but not out of it is overfit. Full methodology in the protocol. How we test.

Open this backtest with its trades   Trades (CSV)

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How to cite

Finaxion Research (2026). Does Bounce off the lower Bollinger band work on FDS?. Daily backtest 1962-01-01–2026-08-31, artifact 30497848a621. https://finaxion.app/en/research/bollinger-bounce/fds

Not a recommendation. Past performance does not guarantee future results.