A financial trading chart displays a sharp market price reversal and upward arrow.

Oil Stock Reversal Strategy (69% Risk-Adjusted Returns)

ByOddmund Groette Trading strategies

Today, we show you an oil stock reversal strategy based on the ETF with the ticker code XLE.

XLE tracks the energy sector. The biggest holdings are Exxon, Chevron, and ConocoPhillips. However, oil service stocks are also included, such as SLB and Kinder Morgan.

Oil Stock Reversal Strategy

Let’s show you the results of the strategy:

A line chart displays long-term portfolio equity growth for an oil stock strategy.
Discover how an Oil Stock Reversal Strategy (69% Risk-Adjusted Returns) drives consistent portfolio gains.

Strategy Type: Reversal.

Market: XLE.

Performance

  • No. of trades: 149
  • Average gain per trade: 0.6%
  • Win ratio: 67%
  • Profit factor: 1.6
  • Annual returns (CAGR): 3.2%
  • Exposure/time in the market: 4%
  • Risk-adjusted return: 69% (CAGR divided by time spent in the market (.04))
  • Max drawdown: -18%

Dividends are not included; thus, the real return is most likely a tad higher.

Trading Rules

We used the following trading rules:

🔒 These trading rules are for members only.

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I’ve got an Msc from Heriot-Watt University, Edinburgh (1996), in addition a to a business administration degree the Norwegian School of Management (BI – 1994). Did my mandatory military service in between.

After university, I worked two years as an auditor (1996-1998).

I co-founded Aksjeforum.com in 1998/99 - one of the first websites about trading and investing in Norway. It was later acquired by Digi.no in 2001.

I have written 4 books about trading (in Norwegian). One of them has sold 30,000 copies, a record for a financial book in Norway.

From 2001 until 2018 full-time independent prop trader (Series 7 in 2001) and investor.

2018-today: Investor, writer, analyst.

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