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Finaxion Research · Smart Money: the liquidity sweep · single stocks · Recomputed 2026-09-10

Does Smart Money: the liquidity sweep work on DGX?

Smart Money: the liquidity sweep does not beat buy-and-hold on DGX: -17.7 points a year over 30 years.

Total return
-27.6%
Buy and hold
×97
CAGR
-1.1%
Sharpe
-1.66
Max drawdown
-36.4%
Trades
90
Out of sample
overfit
Years
30
1×10×97×1997200020032006200920122015201820212024
StrategyDGX

Findings

  1. Smart Money: the liquidity sweep does not beat buy-and-hold on DGX: -17.7 points a year over 30 years.
  2. Against the S&P 500 over the same window: -11.2 points a year.
  3. Total return -27.6% versus ×97 for buy-and-hold, with 90 trades.
  4. The result does not hold out of sample: it is overfit.
  5. Maximum drawdown -36.4%.
  6. It beats in neither half of the history (split at 2011).
  7. It ranks #111 of 227 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 2544360d2bb7.

Exactly what was tested

Mechanical approximation: 25-bar low pierced with a close back above it on the same bar → entry; exit after 20 bars.

How to read it

The verdict compares the strategy with buying and holding DGX 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)

Every strategy on DGX → · Full page for Smart Money: the liquidity sweep →

How to cite

Finaxion Research (2026). Does Smart Money: the liquidity sweep work on DGX?. Daily backtest 1962-01-01–2026-08-31, artifact 2544360d2bb7. https://finaxion.app/en/research/liquidity-sweep/dgx

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