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Author Topic: Meritocratic Isles Stock Market Game on vse.marketwatch.com  (Read 398664 times)
Jasque
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« on: October 16, 2006, 01:05:47 PM »

As discussed here, the Isles are hosting a stock market game on vse.marketwatch.com.  This game is open to the public, so invite your friends to sign up.  I'd like to see a lot of people from NS on the site. 

The game is meant primarily as a learning exercise, but don't let that stop you from being competitive.  I'll create a nice, shiny badge for the winner, and they can attach it to their signature.  I'll also create a forum rank image for stock market winners.  And, finally, the winner can expect to be interviewed for a newspaper article on how awesome (s)he is and how much money (s)he is expected to make in real life.   Cheesy

So, here is how to get started.   Register an account on the website.  (Don't worry, it is completely free.)  Once your account is set up, go to Find a Game to Join.   Type in  "Meritocratic_Isles".  This should take you to the right spot.  From there, it is pretty easy to learn how to make a trade.   If you have any questions, post 'em here.  (Be aware that the game doesn't start untill October 17, so you may have to wait until then to make a trade.)

Game Details

Start Date:  10/17/06
End Date: 01/01/07
Starting Cash:  $100,000
Portfolio Resets: Enabled (in case you want to start over)

Please fill free to use this thread to discuss the game.   We will all learn more if we share a little of our insights/confusions. 
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Jack McDonald,
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Jasque
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« Reply #1 on: October 16, 2006, 01:07:05 PM »

TIPS

I will be posting trading tips here as the game progresses.  If you have any tips, make a comment on this thread and I may add them to the list.

Use the tools on marketwatch.com, or any other tools you may have at your disposal.  It is important to know the direction the market is moving in before you buy or sell a stock. 

Follow the market.  You may be tempted to predict where the market is going before prices begin to change.  If you can do that, great; you'll make a fortune.  But if you are wrong then you are bound to lose money.  It is a safer bet to buy into stocks that already show an upward trend.

Buy ETFs for a relatively safe investment.  ETFs (exchange-traded funds) are similar to mutual funds, but they are designed to simulate a particular stock index.  ETFs are diversified, but they have the same risk/reward features as stocks.   Some common ETFs are:
  • DIA - for the Dow Jones Industrial Average
  • SPY - for the S & P 500 Index
  • QQQQ - for the Nasdaq-100 Index

Finally, here are some tips from Jesse Livermore (a famous speculator in the early 20th century) as written in the novel, "Reminiscences of a Stock Operator", by Edwin Lefevre. 

Quote from: Jesse Livermore
1.  Remember that stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit.
       
2. If a stock doesn't act right don't touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.
       
3. Always sell what shows you a loss and keep what shows you a profit.
       
4. The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have past.
       
5. Don't argue with the tape. Do not seek to lure the profit back. Quit while the quitting is good--and cheap.
       
6. Never buy a stock because it has had a big decline from its previous high.
       
7. There is only one side to the stock market; and it is not the bull side or the bear side but the right side.
       
8. Never act on tips.
       
9. The speculator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you hope that every day will be the last day--and you lose more than you should had you not listened to hope--to the same pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out--too soon. Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. he must fear that his losses may develop into a much bigger loss, and hope that his profit may become a bigger profit. It is absolutely wrong to gamble in stocks the way the average man does.
       
10. A man must believe in himself and his judgment if he expects to make a living at this game.
« Last Edit: October 16, 2006, 08:41:36 PM by Jasque » Logged

Jack McDonald,
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« Reply #2 on: October 16, 2006, 01:17:26 PM »

Current Rank: 1

Go me!  Grin
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Matriarch Porcelina of the Shaelin Khapf
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Jasque
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« Reply #3 on: October 16, 2006, 01:21:15 PM »

I forgot to join the game!   Shocked

Oh look, I just knocked you out of the top spot.  Tongue
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Jack McDonald,
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« Reply #4 on: October 16, 2006, 01:37:16 PM »

Boom. I'm number one
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Bruce Dickinson
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« Reply #5 on: October 16, 2006, 01:40:24 PM »

Yeah and I got number two... Tongue Wegason, I shall beat you!!!
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« Reply #6 on: October 16, 2006, 01:41:35 PM »

I just know I am going to be hopeless at this, seeing as I live in Britain and not America
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Bruce Dickinson
The Anarchist Federation of Freedom Crazy
Former Archon Basileus of the Politeia

Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. – Frederic Bastiat

Give a man some wood for a fire and he will be warm for a night, set a man on fire and he'll be warm for the rest of his life.
Jasque
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« Reply #7 on: October 16, 2006, 01:44:31 PM »

I just know I am going to be hopeless at this, seeing as I live in Britain and not America

You should be able to buy stocks from several different exchanges, including the London Stock Exchange.   
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Jack McDonald,
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« Reply #8 on: October 16, 2006, 01:45:09 PM »

Dont come up with excuses Wegasonian
And Wham! I'm Number 1!!!
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« Reply #9 on: October 16, 2006, 02:30:05 PM »

Number four? Frak!  Angry
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Jasque
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« Reply #10 on: October 16, 2006, 08:42:31 PM »

I added a few tips to the second post.

EDIT:  I almost forgot to ask.  Does everybody understand the basic trading tools on the site?    Here are a few short descriptions.

Short selling - Selling stock that you do not have.  The only reason to do this is because you think the price will go down in the future.  You sell it now, and at some point in the future you buy the stock and deliver it.   If you sell it high and buy it low, you make a profit.  This is very risky.  (It may seem weird to sell stock that you don't own, but remember that you are obligated to deliver the stock in the future.  You are basically making a contract to sell the stock in the future at a fixed price.)

Buying to cover - Buying  stock you have already sold. This is the second step to selling short.     

Market Orders - Orders that are executed immidiately.  The website takes about 20 minutes to process the order, and the price may change in that time. (This is the only type of order I have used so far.)

Stop Orders - An order to buy or sell a stock once the stock reaches a certain price.  The order won't take place until the price is reached.  Once the price is reached, the order becomes a market order. 

Limit Orders - An order to buy or sell the stock unless a specified price is reached.  The order will be executed as a Market Order unless the stock's price moves above/below the specified price (depending on if it is a sell or buy order).  If the order is to sell, it won't take place unless the stock price moves above the specified price.

Trading on Margin - Borrowing money to trade.  Essentially, the stock serves as the collateral for the loan.  By borrowing money you may greatly increase your profit or loss.  Why?  Because you can buy more stock if you borrow money. 
« Last Edit: October 16, 2006, 09:05:32 PM by Jasque » Logged

Jack McDonald,
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Former Archon Basileus of the Politeia
Jasque
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« Reply #11 on: October 17, 2006, 08:52:01 AM »

I'm experimenting with short selling today.  I sold 100 shares of American Eagle (AEOS).  The process seems straitforward, but I'm still not 100% certain of how it all works.
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Jack McDonald,
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« Reply #12 on: October 17, 2006, 02:53:20 PM »

I'm testing everything out...not gonna follow your silly little guide lines Jasque Tongue
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« Reply #13 on: October 17, 2006, 02:59:58 PM »

I'm testing everything out...not gonna follow your silly little guide lines Jasque Tongue

haha Okay, do whatever you want.  Tongue    If you come up with some better guidelines, let me know.
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Jack McDonald,
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Fox
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« Reply #14 on: October 17, 2006, 03:03:59 PM »

how about this?
peopleses, dont try what I am unless you dont care whats going to happen such as go into major losses Cheesy
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~I'm nice, most of the time Cheesy~
Would a better answer have been to point to "Administrator", noting that if God existed, He would never allow so foul and cruel a forum-master to come into being?
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« Reply #15 on: October 17, 2006, 03:54:00 PM »

Eeek, missed the market. Less classes tomorrow, need to get started.  Shocked
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Matriarch Porcelina of the Shaelin Khapf
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Jasque
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« Reply #16 on: October 17, 2006, 04:20:20 PM »

I learned two things today.  I might as well share what I learned.

1)  Always double check your orders.  I almost chose "buy" when I meant to "sell" today.   I also know of somebody who bought when they meant to sell short.   

2)  I decided to experiment with penny stocks today.  I bought 250,000 shares of VTYE for about $0.018.   Unfortunately, the market price is $0.016, so I had an instantaneous loss of $500 (11% of my investment).  I suppose the difference might be in the ask/bid spread (although I'm not sure), but even tiny differences spread out over 250,000 shares can result in relatively large losses.   Sad

Oh, and this is worth mentioning as well.  Some lucky %@$!@&# from my university had a 109% return today.  He doubled the value of his entire portfolio in a single day.   Shocked   That's near impossible to do.  He got extremely lucky on a trade.
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Jack McDonald,
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« Reply #17 on: October 18, 2006, 08:03:37 AM »

Two of my orders disappeared....
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Jasque
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« Reply #18 on: October 18, 2006, 10:36:52 AM »

Two of my orders disappeared....
No, they just took several hours to execute.  I don't know why.  I've had that happen before.  I try not to make trades until the market opens.  That helps a little.

I also see that you have more faith in Victory Energy (VTYE) than I do.  Tongue  I hope something actually happens with that stock.  I didn't do any research--I just looked at the chart and went with my intution.   :Smiley  Maybe you know more than me--?
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Jack McDonald,
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« Reply #19 on: October 18, 2006, 01:23:14 PM »

I have not been able to do anything. I keep getting "Processing Errors."   Sad
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