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Investment method
An investment method is a set of rules for reproducible trading, defined by the following elements:
| element | description |
|---|---|
| Screening | How to find a stock |
| Open | When&How to open a position |
| Close | When&How to close a position |
method evaluation
A method can be evaluated by the following viewpoints:
| viewpoint | description | how to evaluate |
|---|---|---|
| expectation | An expected value of earnings | bigger is better |
| performance | earnings of all past trades based on the method | bigger is better |
method categories
Every method can be categorized with 4 categories by on what open/close decision is based.
| category | based on … |
|---|---|
| fundamentals | intrinsic value |
| technical | pattern matching on past data |
| momentum | supply and demand |
| quants | statistics or trivial market distortions |