Crude Oil: trend-following strategy vs buy & hold
Commodities · tracked with Invesco DB Oil Fund (DBO)
Crude oil is the world's most important commodity. DBO tracks West Texas Intermediate (WTI) oil futures and uses an optimised roll that aims to reduce the cost of switching from one futures contract to the next.
Growth of 100 since 2007
Strategy Alpha vs buy & hold · data to 2026-06Hypothetical backtest incl. estimated trading costs; T-bills when out of the market. Shown with the same 3-month delay as a Free account — the current signal is in the Research Terminal.
What drives Crude Oil
Oil prices are set by global growth, OPEC+ production decisions, inventories, the US dollar and geopolitics. Supply shocks can move the price violently in days.
How a trend-following strategy handles Crude Oil
Oil is cyclical rather than a long-term compounder: buy & hold has had long stretches of losses, while its big moves — up and down — tend to run for months. That makes it a market where the difference between holding and following the trend can be large.
Our Strategy Alpha applies the same simple, rules-based trend filter to every market: invested while the trend is up, in Treasury bills while it is down, checked once a month. It is not a forecast — it is a discipline that aims to keep most of the long climbs and sit out the deepest drawdowns.
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Educational content, not investment advice. Backtested results are hypothetical and do not guarantee future results. Disclaimer.