Simulation of flat-rate purchases using SOXL and purchases during a decline
Most investors believe that returns can be maximized by purchasing when stock prices drop. The volatility is particularly high $Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL.US)$For products such as these, you will feel that it is more advantageous to enter when the market price falls.
We simulated which is more efficient, whether to actually buy with the dollar cost averaging method every month or to buy them all at once when a certain% drop.
Period: past 10 years
① Dollar cost averaging method (monthly fixed purchase): simple strategy to invest 0.1 million yen each month in SOXL
② Purchases when falling: Invest in drinks when the stock price falls by 5%, 10%, 20%, 30%, and 40%
*Investments will be suspended for months when the conditions are not met, and the accumulated funds will be invested in a lump sum after the conditions are met.
upshot
The simulation results were unexpected,
Strategies that buy a fixed amount every month have higher returns than any other strategyI showed it.
The next highest return was 5%, and the worst was 40%.
It overturns the popular belief that “it is more advantageous to buy when it falls.”
We simulated which is more efficient, whether to actually buy with the dollar cost averaging method every month or to buy them all at once when a certain% drop.
Period: past 10 years
① Dollar cost averaging method (monthly fixed purchase): simple strategy to invest 0.1 million yen each month in SOXL
② Purchases when falling: Invest in drinks when the stock price falls by 5%, 10%, 20%, 30%, and 40%
*Investments will be suspended for months when the conditions are not met, and the accumulated funds will be invested in a lump sum after the conditions are met.
upshot
The simulation results were unexpected,
Strategies that buy a fixed amount every month have higher returns than any other strategyI showed it.
The next highest return was 5%, and the worst was 40%.
It overturns the popular belief that “it is more advantageous to buy when it falls.”
In a market with a long-term upward trend, the main reason is that risk is diversified and stable returns can be obtained by continuing to invest at a fixed monthly rate.
On the other hand, purchasing strategies during a decline seem to be able to maximize returns at first glance, but in reality, the waiting period for a decline becomes longer, and there is a risk of missing out on the rising market. As a result, total returns are suppressed.
The compatibility between flat-rate purchases and transactions that match DD and automatic trading is excellent.
There is an item called “algo transactions” in the moomoo app.
I don't know how to use it, so I'm currently analyzing with Python or Excel,
I think the day when analysis is performed with “algo trading” and automatic trading will come soon
There is an item called “algo transactions” in the moomoo app.
I don't know how to use it, so I'm currently analyzing with Python or Excel,
I think the day when analysis is performed with “algo trading” and automatic trading will come soon
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Taca〻 OP : Reference data
Leveraged ETFs TQQQ, SPXL, and TECL NVDA had similar results
MSFT best 5% ⇒ dollar cost ⇒ 10%
AAPL best 10% ⇒ 5% ⇒ dollar cost
VOO best 5% ⇒ 10% ⇒ dollar cost
LLY best 5% ⇒ dollar cost ⇒ 10%
Of these, when it dropped 20%, the entry method did not make it into the top 3.