DeployQuantDrawdown Dip Buyer + 8% Target
Wait for a 10% drawdown from the 20-day high, buy it, and take profit at +8%.
The dip buyer is one of twelve templates tested on the same 59 ETFs over the same window, 2021-01-04 to 2026-10-02, starting from $10,000. It has two rules. When the fund is down more than 10% from its 20-day high and the sleeve is flat, it buys with 98% of the sleeve at the open. Once filled, a limit order rests at the entry price times 1.08. There is no stop, no time exit and no second entry while a position is open.
The median result across the 59 funds is a CAGR of 1.33% with a median max drawdown of 26.19%. It beat buy-and-hold of the same fund in 22 cases. It had a shallower drawdown than holding in 58 cases and a positive CAGR in 32. Those three counts describe three different things. The strategy is in cash most of the time, so a shallow drawdown is easy to get. A positive CAGR needs at least one completed trade. Beating buy-and-hold needs the trades to outrun a fund that simply went up, and that happened mostly where the fund itself did badly.
The median sharpe is 0.28 and the median exposure is 36.6% of the days. The median number of round trips is 2 over almost six years. That is the number to keep in mind for everything below. A strategy that trades twice in the window is described by two data points, and the page tables show it. Where a per-fund page says 100% win rate, it means every closed trade hit the 8% target. It does not mean the strategy never lost money, because open positions at the end of the window and positions that sat deep underwater are counted in the drawdown, not in the win rate.
Each fund has its own page linked from the table, with the trade list and the cost runs. The other templates are on the strategies index, and the closest relatives are the RSI(2) snapback and the RSI mean reversion templates, which also buy weakness.
The rules
- WHEN the market opens · IF not invested AND the 20-day drawdown is worse than −10% · THEN buy with 98% of the sleeve
- WHILE invested · a managed limit order rests at entry price × 1.08
A rule-based buy-the-dip. The entry is a measured 10% drawdown inside the trailing 20 sessions, and the exit is a resting +8% limit order. Between signals the sleeve sits in cash, so the template can wait months for an entry.
Good for: assets that sell off hard and recover; it trades volatility without chasing strength.
Watch out: no stop-loss: if the dip keeps falling, the position rides it down until the +8% target is reached or the strategy is stopped. Trade counts are low, so single trades dominate results.
What the two rules do to a price path
The entry looks at the worst peak-to-trough move inside the trailing 20 sessions. A fund that falls steadily for a month trips it. A fund that grinds sideways does not. A fund that climbs for a year and then drops 10% in two weeks does. The condition is checked when the market opens and only when the sleeve is flat, so the template does not average down or add to a loser.
The exit is the part that shapes the results. A resting limit at 8% above the entry fills the moment price touches it, intraday, with no confirmation and no waiting for a close. That makes every winning trade end at close to the same gain, and it caps the upside of any single trade. A fund that rebounds 30% from the entry point gives the strategy 8% and then the sleeve waits for the next 10% drawdown. In a straight recovery the strategy is flat for the rest of the move. This is why the table shows so many cases where buy-and-hold has a much higher CAGR: SPY returned 14.56% a year held, and the dip buyer made 2.61% with 2 round trips and 22.8% exposure.
The missing stop is the other half. Nothing exits a losing position except the target. If the fund keeps falling after the entry, the position stays open and the drawdown grows until price climbs back 8% above where the sleeve bought. On a fund that never recovers inside the window, the position is still open at the end. The long-bear cases in the table show this directly: TLT has 0 round trips, 76.8% exposure and a CAGR of -4.32%. It bought a dip, never reached the target, and was still holding at the end of the test.
The description on this page lists the caveat in one line: trade counts are low, so single trades dominate results. The year table and the fund table both bear that out.
Build it from blocks (or type it in English), backtest it on 5.7 years of minute data in seconds, tweak any parameter, then paper trade it on live data. No card, no broker needed to start.
Results on every ETF
| ETF | CAGR | buy & hold | max DD | Sharpe | trades | win rate |
|---|---|---|---|---|---|---|
| SOXX | 27.5% | 31.1% | −39.3% | 0.93 | 19 | 100% (+1 open) |
| TECL | 24.7% | 38.2% | −76.3% | 0.67 | 18 | 100% (+1 open) |
| FAS | 24.1% | 18.3% | −65.3% | 0.69 | 18 | 100% (+1 open) |
| ROM | 19.9% | 30.2% | −66.3% | 0.62 | 13 | 100% (+1 open) |
| QLD | 18.6% | 23.6% | −62.0% | 0.63 | 12 | 100% (+1 open) |
| SOXL | 16.4% | 33.3% | −88.5% | 0.67 | 17 | 100% (+1 open) |
| SPUU | 14.2% | 22.5% | −41.3% | 0.63 | 10 | 100% |
| SSO | 13.0% | 21.9% | −41.6% | 0.59 | 9 | 100% |
| TQQQ | 11.9% | 25.4% | −79.6% | 0.49 | 9 | 100% (+1 open) |
| IOO | 8.3% | 16.7% | −10.8% | 1.03 | 6 | 100% |
| XLK | 7.8% | 22.1% | −27.9% | 0.50 | 5 | 100% (+1 open) |
| EEM | 7.1% | 6.6% | −26.2% | 0.56 | 5 | 100% |
| XLF | 6.8% | 12.6% | −16.0% | 0.61 | 5 | 100% |
| QQQE | 5.4% | 9.8% | −25.1% | 0.42 | 4 | 100% |
| QQQ | 5.4% | 16.7% | −28.6% | 0.41 | 4 | 100% |
| QQQM | 5.3% | 16.7% | −28.6% | 0.41 | 4 | 100% |
| VOOG | 4.1% | 15.7% | −26.8% | 0.34 | 3 | 100% |
| VOX | 4.1% | 9.1% | −40.9% | 0.32 | 3 | 100% |
| VOOV | 4.0% | 12.6% | −4.5% | 0.72 | 3 | 100% |
| XLY | 4.0% | 6.3% | −32.7% | 0.30 | 3 | 100% |
| VTV | 4.0% | 13.4% | −4.4% | 0.75 | 3 | 100% |
| CTA | 3.4% | 8.9% | −13.7% | 0.49 | 2 | 100% |
| CLSE | 3.4% | 19.5% | −8.7% | 0.52 | 2 | 100% |
| IWM | 3.1% | 7.5% | −25.9% | 0.26 | 2 | 100% |
| TBF | 2.7% | 12.2% | −8.2% | 0.46 | 2 | 100% |
| VV | 2.6% | 14.3% | −22.1% | 0.27 | 2 | 100% |
| VOO | 2.6% | 14.4% | −15.8% | 0.30 | 2 | 100% |
| SPY | 2.6% | 14.6% | −16.0% | 0.29 | 2 | 100% |
| KMLM | 2.3% | 7.1% | −21.9% | 0.28 | 1 | 100% (+1 open) |
| ALTY | 1.3% | 7.6% | −4.7% | 0.50 | 1 | 100% |
| XLP | 1.3% | 5.8% | −8.0% | 0.44 | 1 | 100% |
| RINF | 1.3% | 6.6% | −2.8% | 0.52 | 1 | 100% |
| AGG | 0.0% | −0.8% | −0.0% | 0.00 | 0 | – |
| BND | 0.0% | −0.8% | −0.0% | 0.00 | 0 | – |
| IEF | 0.0% | −2.3% | −0.0% | 0.00 | 0 | – |
| IEI | 0.0% | −0.4% | −0.0% | 0.00 | 0 | – |
| IGIB | 0.0% | 0.2% | −0.0% | 0.00 | 0 | – |
| SGOV | 0.0% | 3.2% | −0.0% | 0.00 | 0 | – |
| FXE | 0.0% | −0.9% | −0.0% | 0.00 | 0 | – |
| UDN | 0.0% | −1.1% | −0.0% | 0.00 | 0 | – |
| USDU | 0.0% | 5.2% | −0.0% | 0.00 | 0 | – |
| QAI | 0.0% | 3.9% | −0.0% | 0.00 | 0 | – |
| IAU | −0.8% | 13.7% | −24.9% | -0.04 | 2 | 100% (+1 open) |
| SPDN | −1.7% | −9.7% | −24.1% | -0.23 | 2 | 100% (+1 open) |
| SH | −1.9% | −10.0% | −24.4% | -0.25 | 2 | 100% (+1 open) |
| TLT | −4.3% | −8.2% | −27.8% | -0.27 | 0 | – (+1 open) |
| UST | −5.1% | −8.5% | −31.6% | -0.33 | 0 | – (+1 open) |
| PSQ | −9.3% | −13.8% | −55.4% | -0.41 | 3 | 100% (+1 open) |
| EEV | −9.9% | −16.1% | −77.2% | -0.13 | 9 | 100% (+1 open) |
| VXZ | −15.8% | −15.1% | −63.0% | -0.52 | 0 | – (+1 open) |
| VIXM | −16.7% | −16.1% | −65.3% | -0.51 | 0 | – (+1 open) |
| SDS | −19.9% | −21.6% | −75.3% | -0.56 | 1 | 100% (+1 open) |
| QID | −27.1% | −29.5% | −86.6% | -0.56 | 3 | 100% (+1 open) |
| TMF | −29.8% | −31.2% | −87.5% | -0.69 | 0 | – (+1 open) |
| REW | −33.5% | −36.1% | −91.1% | -0.67 | 1 | 100% (+1 open) |
| SQQQ | −39.2% | −42.3% | −96.0% | -0.54 | 4 | 100% (+1 open) |
| TECS | −45.3% | −46.7% | −97.4% | -0.67 | 2 | 100% (+1 open) |
| SOXS | −46.2% | −48.3% | −97.9% | -0.44 | 4 | 100% (+1 open) |
| UVXY | −48.7% | −48.7% | −97.8% | -0.86 | 0 | – (+1 open) |
Reading the 59-ETF table
The top of the table is led by funds with big, frequent swings. SOXX made 27.48% with 19 round trips and 64.4% exposure, against 31.11% for holding it. TECL made 24.71% with 18 round trips and 87.5% exposure, against 38.16% held. FAS made 24.15% against 18.34% held. FAS is the clearest case in the list where the strategy beat the fund it traded, with a max drawdown of 65.26%. The FAS page has the trade list.
The common feature of the top rows is trade count. Funds with 9 to 19 round trips are the ones where the rules got repeated chances to fire. A semiconductor fund or a 3x fund trips the 10% drawdown rule often because its normal swings are large. A broad index fund such as SPY or VOO gives 2 round trips, and the CAGR is 2.61% and 2.62%.
The cost of high trade counts shows in drawdown. SOXL made 16.42% with an 88.53% max drawdown and 96.8% exposure. TQQQ made 11.91% with a 79.56% drawdown. The strategy did not make these funds safer. It took a position after a 10% fall, and these funds can fall much further after that. In SOXL the position was open for nearly the whole window because the target was reached slowly after each deep decline. Leveraged funds have a higher median CAGR than the broad group, but the max drawdown in the table is the number that goes with it.
Where the strategy had nothing to do the table is flat. AGG, BND, IEF, IEI, IGIB, SGOV, FXE, UDN, USDU and QAI all show 0 round trips and 0.0% CAGR. The funds never fell 10% inside a 20-day window, or never fell far enough to trigger an entry, so the sleeve stayed in cash. A result of exactly 0.0% with 0.0% drawdown is the strategy staying out, and the buy-and-hold column is the comparison. SGOV held 3.22% a year and USDU held 5.22%, so staying in cash cost those funds their return. IEF held at -2.29% and the strategy avoided it.
At the bottom are the inverse and volatility funds. UVXY made -48.70% against -48.74% held, with 0 round trips and 98.6% exposure: it bought once and the target never came. SOXS made -46.17% against -48.27% held, TECS -45.31% against -46.67% and SQQQ -39.18% against -42.33%. Each of those three closed a few trades, 4, 2 and 4, and each stayed invested about 98% of the days. The SOXS page shows a 97.89% max drawdown. The strategy took the 8% gains it was offered on these funds, but the long declines between them were larger than the gains.
Results by fund type
| Fund type | ETFs | Median CAGR | Median buy & hold | Median max DD | Beat holding |
|---|---|---|---|---|---|
| Broad index ETFs | 12 | 4.1% | 14.4% | −25.1% | 1 of 12 |
| Sector ETFs | 6 | 6.8% | 12.6% | −32.7% | 0 of 6 |
| Leveraged ETFs | 10 | 16.4% | 23.6% | −66.3% | 3 of 10 |
| Inverse ETFs | 11 | −19.9% | −21.6% | −77.2% | 10 of 11 |
| Bond ETFs | 7 | 0.0% | −0.8% | −0.0% | 5 of 7 |
| Commodity ETFs | 1 | −0.8% | 13.7% | −24.9% | 0 of 1 |
| Currency ETFs | 3 | 0.0% | −0.9% | −0.0% | 2 of 3 |
| Volatility products | 3 | −16.7% | −16.1% | −65.3% | 1 of 3 |
| Alternative-strategy ETFs | 6 | 2.3% | 7.6% | −8.7% | 0 of 6 |
How the fund groups compare
Leveraged ETFs have the highest median CAGR at 16.42% across 10 funds, with a median max drawdown of 66.32%. Their median buy-and-hold CAGR is 23.55%, and the strategy beat holding in 3 of the 10. This is the group where a 10% dip is routine and the 8% bounce arrives often, so trade counts are high.
Broad index ETFs sit at 4.11% median CAGR with a 25.05% median drawdown across 12 funds, against 14.42% held. Only 1 of the 12 beat holding. These funds had a long uptrend in the window, with few dips deep enough to trip the entry, and the strategy missed most of the move. QQQ shows 5.37% against 16.70% held, with 4 round trips and 30.4% exposure.
Sector ETFs have a median of 6.78% against 12.58% held, and none of the 6 beat holding. SOXX is in this group and beat nothing, but it was the closest to its benchmark in the whole list at the top end, 27.48% against 31.11%.
Alternative-strategy ETFs made a median 2.25% against 7.61% held, with a median drawdown of 8.68%. None of the 6 beat holding. These funds are already low in volatility, so a 10% drawdown rarely appears. The strategy sat in cash and the funds went up without it.
The cases where the strategy beat holding are mostly funds that lost money. The inverse group has a median of -19.86% against -21.57% held, and 10 of the 11 beat holding by a small margin. Bond ETFs had a median of 0.00% against -0.78%, with 5 of 7 ahead. Currency ETFs: 2 of 3. The strategy did better than holding because it was in cash during falls, and it did not turn those funds into winners. The inverse group has the deepest median drawdown in the table, 77.21%. Volatility products had a median CAGR of -16.68% against -16.06% held, and 1 of the 3 beat holding, UVXY by a hair.
The one commodity fund, IAU, made -0.78% against 13.66% held with 2 round trips and a 24.88% drawdown. It is a useful case. Gold rose strongly in the window, the dip buyer took two small gains and then held a position that went against it.
Year by year, median across all ETFs
| Year | dip buyer | Buy & hold | ETFs with a gain |
|---|---|---|---|
| 2021 | 0.0% | 4.1% | 15 of 59 |
| 2022 | 0.0% | −12.7% | 21 of 59 |
| 2023 | 0.0% | 8.9% | 27 of 59 |
| 2024 | 0.0% | 9.7% | 19 of 59 |
| 2025 | 5.2% | 11.1% | 31 of 59 |
| 2026 | 0.0% | 3.7% | 13 of 59 |
The median year was flat
The year table reports the median across all 59 funds. In 2021, 2022, 2023, 2024 and 2026 the median strategy return is 0.0%. In 2025 it is 5.2%. A median of 0.0% means that for at least half of the funds the strategy made no gain in that calendar year, which is what a template that waits for a 10% fall looks like in most calendar years.
The buy-and-hold median in the same table moved between -12.7% in 2022 and 11.1% in 2025. In 2022 the median held fund lost 12.7%, and the median dip buyer made 0.0%. That is the year the template was built for, a falling market with many drawdowns, and it still did not produce a median gain. Falling markets give entries early and slowly, and the 8% target is often not reached before the year ends. In that year 21 of 59 funds had a gain with the strategy.
The count of funds with a gain rises in 2023 to 27 of 59, and in 2025 to 31 of 59. 2025 is also the only year with a non-zero median return. The window includes a sharp sell-off and rebound in that year, and a template that buys a fast 10% drop and sells at 8% above has the best conditions when the drop is quick and the rebound is quick. In 2024, 19 of 59 funds gained. In 2026, which stops at 2026-10-02, 13 of 59 did. 2021 shows 15 of 59.
The pattern across the years is that the strategy earns in a few bursts and then waits. The CAGR in the 59-ETF table is the compounded effect of those bursts over 5.74 years, so a single burst in 2025 can supply most of a fund's total gain. The year-by-year table on each fund page splits a fund's own return by calendar year, and that is where to see the bursts for a specific fund. The momentum breakout and 3-month momentum templates both have a median CAGR of 0, so the dip buyer is not the only template that sits out most years.
Changing the parameters
| Version | Median CAGR | Median max DD | Median round trips |
|---|---|---|---|
| Published rules | 1.3% | −26.2% | 2 |
| -7% drawdown / 8% target | 3.2% | −28.2% | 3 |
| -15% drawdown / 8% target | 0.0% | −7.7% | 1 |
| -10% drawdown / 6% target | 1.2% | −25.9% | 3 |
| -10% drawdown / 10% target | 1.7% | −26.2% | 2 |
What the four parameter versions show
The page tests four variants against the published rules. The published rules have a median CAGR of 1.33%, a median max drawdown of 26.19% and a median of 2 round trips.
A shallower entry, -7% instead of -10%, gives a median CAGR of 3.18% with a 28.16% median max drawdown and 3 round trips. More dips qualify, so the strategy trades more and spends more days invested. The median drawdown is deeper because the entry is earlier in each fall. This is the version with the highest median CAGR in the set.
A deeper entry, -15%, gives a median CAGR of 0.00%, a 7.7% median drawdown and 1 round trip. At that threshold, most of the 59 funds never fell far enough inside a 20-day window within these years. The sleeve stayed in cash for the median fund. The funds that did trigger, mostly leveraged and sector funds, are hidden by the median.
Changing the target moves the numbers less. A -10% entry with a 6% target gives 1.18% median CAGR, a 25.93% median drawdown and 3 round trips. A 10% target gives 1.68%, a 26.19% drawdown and 2 round trips. The 10% target pays more per winning trade but takes longer to fill, so the position stays open and exposed for more days. The drawdown figure is unchanged from the published rules because the drawdowns come mostly from positions that never reached the target in any version.
The entry threshold matters more than the target. Moving the entry from -10% to -7% roughly changes the trade count, while changing the target by 2 points in either direction changes the median CAGR by under 2 points. Those comparisons are between medians of 59 funds, each with only a few trades, so they show direction and not a tuned optimum. Picking the -7% version because it has the highest median would be fitting to this one window.
The published parameters are not an optimized set. The 20-day window and the 98% sleeve fraction were not varied in these runs. To see what a different window does, each of the 59 pages lists the same four variants for that fund, and the strategy can be edited and rerun on the DeployQuant sign-up flow.
Frequently asked questions
What is the dip buyer strategy?
Wait for a 10% drawdown from the 20-day high, buy it, and take profit at +8%. A rule-based buy-the-dip. The entry is a measured 10% drawdown inside the trailing 20 sessions, and the exit is a resting +8% limit order. Between signals the sleeve sits in cash, so the template can wait months for an entry.
Does dip buyer beat buy-and-hold?
Across 59 ETFs backtested 2021-01-04 to 2026-10-02, it beat same-ETF buy-and-hold on 22 of 59 (37%). Median CAGR was 1.3% with a median max drawdown of 26.2%. Per-ETF results vary widely; the table lists every one.
What counts as a 10% dip?
The engine computes the worst peak-to-trough move within the last 20 sessions. When it is deeper than −10%, the entry condition is met. Both the window and the threshold are editable parameters.
How often does the dip buyer trade?
Rarely. The median fund had 2 round trips in the window from 2021-01-04 to 2026-10-02, and the median exposure was 36.6% of days. SOXX had the most with 19 round trips. Ten funds, mostly bond and currency ETFs, had 0 round trips because they never reached the entry condition.
Did the dip buyer beat buy-and-hold?
On 22 of 59 funds. The median CAGR was 1.33% against buy-and-hold results that are higher for most equity funds. The cases where it won were mostly funds that lost money when held, such as the inverse ETFs, where 10 of 11 were ahead, and FAS, which made 24.15% against 18.34% held.
Why is the median return in most years 0.0%?
A 10% fall from the 20-day high is not common in a rising fund, so for half or more of the 59 funds there was no completed trade in a given calendar year. Only 2025 shows a median gain, at 5.2%. The year table is a median across funds, and individual funds had their own gains in other years.
Does the strategy have a stop-loss?
No. The only exit is the resting limit at 8% above the entry price. If the fund keeps falling, the position stays open and the drawdown grows. TLT is an example: 0 round trips, 76.8% exposure, a CAGR of -4.32% and a max drawdown of 27.81%.
What happens if I change the entry to -7% or -15%?
A -7% entry gave a median CAGR of 3.18% with 3 round trips and a 28.16% median drawdown. A -15% entry gave 0.00% with 1 round trip, because the median fund rarely fell that far inside 20 days. These are medians across 59 funds in one window.
Which funds worked best with the dip buyer?
SOXX at 27.48% CAGR, TECL at 24.71% and FAS at 24.15%. All three had 18 or more round trips. They also carried drawdowns of 39.25%, 76.28% and 65.26%, so the returns came with large declines along the way.
Is the backtest realistic?
It uses minute-resolution US market data and fills orders on minute bars, with $10,000 starting capital and no margin. The headline run has no fees or slippage. Results are hypothetical, cover one window of 5.74 years, and the trade counts are small.
Compare with other strategies
Backtests are hypothetical, computed by DeployQuant's engine on minute-resolution consolidated US market data (2021-01-04 to 2026-10-02, $10,000 starting capital, no margin, no fees or slippage in the headline run; buy-and-hold puts 98% of the account in at the first open, as the templates do) and do not guarantee future results. Nothing on this page is investment advice. Live trading involves risk of loss.