Buy the Dip: does it work?

"Buy the dip", adding to a stock right after a sharp weekly loss on the expectation of a rebound, is one of the most repeated pieces of retail trading advice.

The rule we tested. Buying the worst-performing names after a crash week and holding for a fixed 20-session period, a mechanical buy-the-dip rebound rule, not a hand-picked entry.

• Crash-week loser rebound, 20-session hold (wide US stocks) (171 US stocks (AAPL, NVDA, AVGO, ORCL, …)), 2016-09-15 to 2025-03-14, costs 0.05% per side: −1.1 pts/yr vs buy-and-hold across 30 trades, p=1.000, q=1.000 after correction: did not beat buy-and-hold.

No. US stocks −1.1 pts/yr vs buy-and-hold (p=1.000, q=1.000). None cleared Tickfloor's Benjamini-Hochberg q<0.10 bar once weighed against every other rule tested alongside it.

This is one line in a wider check: Tickfloor's research desk has run 401 strategies against buy-and-hold, and after correcting for how many were tested (Benjamini-Hochberg, 444 tests), 0 survived. A single win-rate claim like this one is exactly the kind of result that check exists to catch before anyone trades on it.

General information only. It doesn't consider your objectives, finances or needs. Tickfloor holds no financial services licence and never places trades.

Does "buy the dip" actually work?

No. US stocks −1.1 pts/yr vs buy-and-hold (p=1.000, q=1.000). None cleared Tickfloor's Benjamini-Hochberg q<0.10 bar once weighed against every other rule tested alongside it.

What exact rule did Tickfloor test?

Buying the worst-performing names after a crash week and holding for a fixed 20-session period, a mechanical buy-the-dip rebound rule, not a hand-picked entry.

Is this financial advice?

No. This measures a publicly claimed strategy rule, not a recommendation. General information only, not personal advice.

See the full numbers on the Pairs and stat arb family page, or the full method and every result.

Other rules we've tested: The January Effect, Golden Cross / Death Cross, RSI(2) Mean Reversion.

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