BUSTED BY COSTS

21-day SMA band credit spreads (stop and reverse) backtest: does it work after costs?

We coded the 21-day sma band credit spreads (stop and reverse) strategy exactly as taught in a public video and ran it on NIFTY monthly, 2017-01 to 2026-10, with real charges. Claimed ₹3.10 L. Reality −₹14,683. As taught, 1 lot made about ₹31.6k net over nearly 10 years, and lost about ₹11k over the video's own 2021-2025 window.

Net after costs: ₹31,660
Win rate: —
Worst drawdown: −₹67,387
Reality Score: 40/100

The rules, as taught

At 15:20 compare NIFTY to the 21-day SMA of daily highs and of daily lows: above the upper line sell a bull put spread, below the lower line a bear call spread, in between hold; an opposite signal exits and reverses. Monthly expiry, 100-point OTM strikes, bought leg within 500 points, net credit ₹90-140; roll to next month after the 15th. Gaps we filled: farthest OTM strike when several qualify, nearest credit when none does.

What the video claims, and what we found

Claim: About ₹3.1 L on ₹1 L capital over 2021-2025, max drawdown about 25%.

Our signal dates match the examples on their chart and the trade count is similar, but their profit per trade is about 5x ours; even with no costs and a flat quantity we got only about +₹47k for 2021-2025 vs their ₹3.1 L.

See the full results, charts and every trade

Questions people ask

Does the 21-day SMA band credit spreads strategy work?

Not as taught, once real charges are included. As taught, 1 lot made about ₹31.6k net over nearly 10 years, and lost about ₹11k over the video's own 2021-2025 window. Tested on NIFTY monthly, 2017-01 to 2026-10, after real costs. Reality Score 40/100.

What is the win rate of the 21-day SMA band credit spreads strategy after costs?

We did not count a per-trade win rate for this one; the net result after real charges was ₹31,660 with a worst drawdown of −₹67,387.

How much did it make or lose in the backtest?

Claimed ₹3.10 L. Reality −₹14,683. Over 2017-01 to 2026-10 (1 lot, lot size of the day), the net after charges was ₹31,660 and the worst fall from a peak was −₹67,387.

What exact rules were tested?

How was the 21-day SMA band credit spreads backtest done?

On 1-minute exchange data since 2017, signals filled at the next minute's open, with real broker charges, STT, exchange fees, SEBI fee, stamp duty and GST, and the lot size of each date. Rules exactly as taught; gaps we had to fill are stated. Full method on our How we test page.

Run it yourself — coming soon

These rules use features our public backtester can't express exactly yet, so we won't pre-fill an approximation. Build your own idea in the meantime.

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Important

These are educational backtests of publicly taught rules, not investment advice or a recommendation to trade. Algrow is not registered with SEBI as an investment adviser or research analyst. Past results, real or simulated, do not predict future results; option trading can lose more than the premium or margin used.

Method: 1-minute historical exchange data; signals filled at the next minute's open unless the rules say otherwise; real broker charges, STT, exchange fees, stamp duty and GST; lot size as on each trade date. Where a video leaves a rule open, the assumption we made is stated. We test only the rules as presented and paraphrase the claim; watch the video for the creator's full explanation. Full method: how we test.

Creators can request a review or correction: write to [email protected] with the page link and what you believe is wrong. We will re-run the test and update the page.