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The Low-Risk Pullback Strategy: Why 16% Exposure Beat Buy-and-Hold on a Risk-Adjusted Basis
How a strategy that sits in cash 84% of the time still out-earns buy-and-hold on a risk-adjusted basis
There’s a persistent myth in retail trading that more time in the market equals more return. Buy-and-hold SPY, and you’re exposed to every crash, every drawdown, every gut-wrenching selloff — 100% of the time. But what if you could capture a meaningful slice of the upside while your capital sat on the sidelines, out of harm’s way, more than 80% of the time?
That’s exactly what the Low-Risk Pullback Strategy sets out to do.
The Idea
Most traders chase breakouts because they’re exciting — price surges, momentum builds, everyone piles in. But breakouts are also where you’re paying the highest price for the least certainty. A pullback strategy flips that logic: instead of chasing the stock after the move, you wait for the market to come back to you.
The rules are simple:
- Stay on the right side of the trend. Only look for entries while price is above its 200-day SMA — the long-term uptrend filter. No trend, no trade.
- Wait for the dip. A fast, 4-period RSI dropping below…
