Buy & Hold Strategy
The benchmark for everything else — buy on day one, hold forever. The reference every strategy is measured against.
Quick Facts
- Type:
- Reference
- Plan:
- Free
- Asset Classes:
- Crypto · Stocks · ETF · Commodities · Forex
- Indicators:
- —
Platform Backtest
ⓘ- CAGR
- +18.1%
- Win Rate
- —
- Max DD
- -60%
Default parameters · BTCUSDT · 1d · 4 years · B&H +18.1%
How It Works
Buy & Hold is the simplest possible strategy: invest your entire capital on day one of the trading window, then hold the asset until the end of the period — no matter what happens in between. There are no entry signals, no exit signals, no parameters.
Why it matters: Buy & Hold is the benchmark against which every active strategy must justify itself. A strategy that earns 15 % CAGR sounds great until you learn Buy & Hold made 30 % over the same period — your trading effort actually destroyed value. Conversely, a strategy that earns 8 % during a year when Buy & Hold lost −40 % is genuinely producing alpha.
On the platform: every backtest result automatically reports two Buy & Hold variants for context:
- B&H (Day 1): simple buy on the first trading day of the period.
- Avg B&H: average performance across all valid entry days within the period (with a 20 % minimum-remaining-time constraint), so the benchmark isn't biased by a lucky/unlucky single starting day.
The "Buy & Hold" strategy itself uses the Day 1 variant. If you want to compare against a more robust benchmark, look at the Avg B&H line that appears alongside every backtest result.
Entry & Exit Rules
Entry
- ●Day 1 of the trading window — buy at open
- ●Position is currently flat (always true at start)
Exit
- ●Last day of the trading window — sell at close
- ●Otherwise: never sell
Live Backtest
BTCUSDT · 1d · 4 years · default parameters · refreshed daily
Run with my own parameters →Pseudo-Code
expand
// Day 1
BUY at open
// All other days
HOLD
// Last day
SELL at closeStrengths & Weaknesses
Strengths
- ●Zero effort — no monitoring, no decisions
- ●Tax-efficient (single buy, single sell)
- ●Best benchmark for evaluating active strategies
- ●Captures all of an asset's upside without timing risk
Weaknesses
- ●Full exposure to drawdowns — capital can drop 80 %+ in crypto bear markets
- ●Returns depend heavily on the start date (timing of the entry)
- ●No risk management — psychologically painful in crashes
- ●Doesn't capitalize on volatility (no rebalancing)
Frequently Asked Questions
Why is Buy & Hold so hard to beat?
Two reasons. First, in long-term bull markets (Bitcoin since 2010, S&P 500 since 1980), the asset itself does most of the work — any strategy that exits during the trend gives up alpha. Second, transaction costs and bad timing add up: studies show that even professionals with full information mostly underperform B&H over long horizons. Active strategies still have value (they reduce drawdowns), but pure return is a high bar to clear.
What's the difference between B&H and DCA?
Buy & Hold puts all capital in on day one — you're fully exposed from the start. DCA (Dollar-Cost Averaging) spreads the same capital over many smaller purchases (e.g. weekly) — you're gradually exposed. B&H wins in steady uptrends; DCA wins when the market is volatile or temporarily dropping after your start date. Both are simple reference strategies — pick whichever matches your reality.
When should I prefer Buy & Hold over an active strategy?
When you have a strong long-term thesis on the asset ("Bitcoin will be worth more in 10 years"), can stomach 50–80 % drawdowns without panic-selling, and have no time/inclination to monitor signals. Active strategies are worth the effort if you want lower drawdowns at the cost of some upside, or if you're trading assets without strong long-term tailwinds.
Related Strategies
DCA (Dollar-Cost Averaging)
Buy a fixed amount on a fixed schedule — week after week, regardless of price. Smooths volatility, removes timing decisions.
Golden Cross
The classic trend-following signal — when the 50-day SMA crosses above the 200-day SMA, the trend has flipped bullish.
RSI / SMA Cross
A momentum signal that triggers when the RSI crosses its own moving average — combining oversold detection with trend confirmation.
Don't want to backtest yourself?
Check out our Strategy Insights Reports — pre-baked deep-dives with historical results, comparisons, and market context.