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Investment Methodology (Stocks)

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Summarized by durumis AI

  • The infinite buying and seven-split methodologies share similar steps, including stock selection, investment amount allocation, buy/sell timing determination, and process execution, but differ in their specific details at each stage.
  • I selected four US stock ETFs, TQQQ, FNGU, SOXL, and UPRO, invested in 2-3 installments, and built an automated buy/sell system through RPA programming.
  • Currently, as of May 2024, I am monitoring the results for a month and adjusting the system. I am also applying the same methodology to Korean stocks, but with a lower investment proportion than US stocks.

Investment Methodology

Analyzing the Infinite Buying Method and the Seven Split Method, I found a few commonalities.
Selecting a stock.
Determining the amount of investment in the stock and splitting it.
Deciding on the time to invest and withdraw the investment.
Properly executing the process.
I realized that steps 1-4 were not easy at all.


1. Select a stock.

Basically, it should be a stock that is growing long-term and upwards.

It should not be delisted and have high volatility.

Therefore, the Infinite Buying Method recommends ETFs and 3X leveraged stocks among US stocks.

So, I selected 4 stocks: TQQQ, FNGU, SOXL, and UPRO.


2. Determine the amount of investment in the stock and split it.

The Infinite Buying Method can be considered to have split the investment into 80 parts in the end,

and the Seven Split Method can be considered to have split it into 7 parts.

My initial investment was not large, and

after programming, I decided to review additional purchases while monitoring,

so I planned to initially split each stock into only 2-3 parts.

It was difficult to program the amount calculation in a complex way from the beginning, so I considered it as an even split.

3. Decide on the time to invest and withdraw the investment.

The first purchase is made when you don't own the stock and buy the amount of the 1st tier.

Ex) In the case of FNGU, 240 / 2 => buy 120, and if the current price of FNGU is 35.05, buy 3 shares.
(Do not exceed the amount that can be bought. In other words, 120 / 35.05 = 3.423, but it becomes 3 by truncating.)

The second purchase is made when the price reaches DOWN_RT down from the price of the first purchase.

Ex) If the current price of FNGU is 35.05 X 0.975 => 34.1737,

120 / 34.1737 => 3.5114, so buy 3 shares at 34.1737.

If the current price of FNGU is 34.1737 X 0.975 => 33.3193 after buying at 34.1737,

do not proceed with the third purchase. Why?! Because TOTAL_TIER is set to 2.

In other words, even if FNGU falls further, there is no remaining cash to buy more.

Conversely, selling is performed when the price reaches UP_RT up from the amount purchased.

Ex) If you bought 3 shares at 34.1737, and the current price of FNGU is 34.1737 X 1.05 => 35.8823,

sell 3 shares at 35.8823. (Currently, you own 6 shares of FNGU, but only sell the ones you bought second.)


4. Properly execute the process.

Although LOC buying/selling can also execute the planned buying/selling,

since this methodology was about continuously monitoring high-volatility stocks and repeating buying/selling,

program the monitoring of the current prices of the stocks to be monitored with RPA repeatedly,

and program the proper execution of buying/selling according to the three conditions above.


Conclusion

Actually, each methodology has its own advantages and disadvantages, and I think individual preferences are a major decision-making factor.

Since I am still lacking in my studies of stocks and the overall economy,

the quickest way was to find and analyze the experiences and know-how of my seniors and try it out.

Now that I've started, I'll need to monitor the results for at least August 2021 and adjust accordingly.


Postscript

I'm also trading Korean stocks using the same methodology, but

the execution method is slightly different,

and it is executed more accurately by using APIs provided by securities firms, but
my personal investment share is lower than US stocks.

(To invest in leveraged ETFs in Korean stocks, you need a basic deposit of 10 million won?!!!)

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