Strategies/ML Defensive

ML Defensive

Defensive Strategy

ML Defensive is designed to protect capital during market downturns while still generating positive real returns. The strategy holds healthcare (XLV), consumer discretionary (XLY), gold (GLD), and short-term Treasuries (SGOV). Gold and SGOV typically provide negative correlation to equities during risk-off events — this is the strategy's primary shock absorber. It has been live in a $1,000,000 Alpaca paper account since March 6, 2026 and targets a max drawdown of under 10% from peak.

Moderate RiskDefensiveCapital preservationLive Alpaca account

What it does

Holds a mix of defensive stocks, gold, and short-term Treasuries. The ML model tilts toward safety assets when it detects market stress, with a goal of losing less than 10% from any peak.

Best for

Investors who prioritise not losing money over maximising returns — especially useful as a comparison point against the more aggressive bots.

What to expect

Lower returns than ML Aggressive or ETF Momentum in bull markets, but significantly smaller drawdowns. Slow and steady compounding is the design goal.

Typical Holdings (Dynamic Strategy)

GLD 18%XLV 20%XLY 17%SGOV 35%IEF 10%

Holdings shown are representative. The live bot selects tickers dynamically each week based on momentum signals.

Live Account Performance

● Real Alpaca Paper Account

Normalised to $10,000 start. Data from live Alpaca paper account — reflects real orders, real fills, and real risk management decisions.

Backtest Simulation · Not Real Trading

5-Year Historical Simulation

Simulated using representative fixed weights — the live bot selects holdings dynamically, so actual results differ.

How It Actually Trades

Pro

Analyze a portfolio matching this strategy

Enter your tickers and see a full 5-year breakdown.

Live chart: real Alpaca paper account data. Simulation chart: historical price data from Yahoo Finance with representative fixed weights. Past performance does not guarantee future results.