Does the Money Flow Index strategy beat buy & hold on Polkadot? (DOT · backtested honestly)
The Money Flow Index is a volume-weighted version of RSI: instead of counting price changes alone, it weights each day by its trading volume (using the typical price - the high, low and close averaged - times volume), then measures how stretched recent buying pressure is versus selling pressure on a 0 to 100 scale. Below 20 is called 'oversold', above 80 'overbought' - a gauge of stretch, not a prediction of a turn. Buy when it is oversold, betting on a bounce, and exit when it becomes overbought. It is the same mean-reversion bet as the RSI Reversion rule already in this library, with volume as the only extra information - so on constant, thin or volume-less data it collapses toward plain RSI. Like any mean-reversion oscillator it fights the trend and whipsaws in choppy ranges, so a strong move can run it over (a falling knife), and volume itself can be noisy or patchy.
Run it yourself
Change the parameters and the window, then re-run — no account needed.
A live badge that re-runs itself and links back here. Free to embed on any blog, newsletter or forum — it shows the honest result, beat or lagged.
<iframe src="https://stratsemble.com/embed/polkadot-mfi-backtest" width="360" height="252" style="border:0;border-radius:12px;max-width:100%" loading="lazy" title="Does the Money Flow Index strategy beat buy & hold on Polkadot?"></iframe>- • The strategy line is Money Flow Index on Polkadot; the dashed line is simply buying and holding DOT. Beating the dashed line is the whole point — many strategies don't.
- • Max drawdown is the worst peak-to-trough fall you'd have sat through. A higher return with a much deeper drawdown is not obviously better.
- • Every fill assumes next-open execution with costs & slippage on — no acting on prices you couldn't have known.
- • A small number of trades means a small sample. Treat a great-looking result on a handful of trades with suspicion.
This is a hypothetical backtest of a well-known mechanism on past data. It is not advice, not a prediction, and not a claim that the strategy works. I hold no funds and place no orders. The value here is the ability to test an idea honestly — see where it would have helped, and where it would have hurt — before you ever risk real money on your own broker.
How this is computed → · who's behind it · where a backtest fits