*OFFICIAL* Bragging/Bitching Thread for 2+2 Trading Competition

[James Boston]

Apparently I suck... Day 2 = -$5K

[player24]

A couple simple observations:

At least one of us is trying to 'game' the competition by concentrating the entire portfolio in one high risk security (so far, so good). (All-in with a gut shot draw = high risk, high return potential...taking down the pot, in this case, is great - but it doesn't prove much in terms of ability.)

Nearly everyone is 100% long. Not many short sellers. Apparently, we believe that we should buy 'undervalued' stocks, but we are averse to selling 'overvalued' stocks. The net result, is that nearly every portfolio is sensitive to broad market moves (not exactly a hedge fund or trading strategy, but appropriate for investment portfolios with long-term horizons.)

Turnover is low, pretty much across the board. Risk is being managed via diversification rather than with stops (so far). Again, not very similar to strategies employed by professional traders (more similar to investors).

[wildwood]

Hi player,
A few thoughts in response to your observations. [ QUOTE ]
At least one of us is trying to 'game' the competition

[/ QUOTE ] If you mean I'm trying to win, you're absolutely correct, if you mean something different, please explain. [ QUOTE ]
by concentrating the entire portfolio in one high risk security

[/ QUOTE ] A four month stock market contest will be won by concentration, not diversification in my opinion. If the time horizon was five years, my strategy would certainly be much different. [ QUOTE ]
Apparently, we believe that we should buy 'undervalued' stocks

[/ QUOTE ] While that may be true for most of the participants, I'm trading a stock at all-time highs. fwiw

[player24]

[ QUOTE ]
Hi player,
A few thoughts in response to your observations. [ QUOTE ]
At least one of us is trying to 'game' the competition

[/ QUOTE ] If you mean I'm trying to win, you're absolutely correct, if you mean something different, please explain. [ QUOTE ]
by concentrating the entire portfolio in one high risk security

[/ QUOTE ] A four month stock market contest will be won by concentration, not diversification. If the time horizon was five years, my strategy would certainly be much different. [ QUOTE ]
Apparently, we believe that we should buy 'undervalued' stocks

[/ QUOTE ] While that may be true for most of the participants, I'm trading a stock at all-time highs. fwiw

[/ QUOTE ]

Perhaps the best analogy would be play-money poker. If we all sat down at the table with play money, some of us would (conceivably) play according to our 'normal' discipline - viewing the game as a test of skill. In contrast, some of us would (probably) play like maniacs, taking ill-advised risks, devaluing skill and making a mockery of the competition.

IMO, picking one high volatility stock and pressing the bet to the max conflicts with the basic intent of the competition - but It is a fair strategy. As things stand, most of us will be competing for second place - although it is possible that your strategy will be contagious and others will decide to bet their entire stack on a gamble.

I used the word 'undervalued' as a catch-all-phrase to describe stocks that we believed would rise in price (whether for technical, fundamental or valuation reasons). I was merely noting the fact that this group seems averse, generally, to shorting stocks that they believe will fall in price.

[wildwood]

[ QUOTE ]
Perhaps the best analogy would be play-money poker. If we all sat down at the table with play money, some of us would (conceivably) play according to our 'normal' discipline - viewing the game as a test of skill. In contrast, some of us would (probably) play like maniacs, taking ill-advised risks, devaluing skill and making a mockery of the competition.

[/ QUOTE ]

Hi player,
Thanks for your reply. I would like to add that, in my opinion, I think gold might trade in the high 400's by the end of this year or early next year. The stock I'm trading is a Canadian gold junior that is unhedged, has no debt, and has good management in my opinion. If I'm right about the gold price direction, this stock might not be as ill-advised and risky as you think. Also I have done nothing to mock the competition or devalue skill (I do have 25 years of experience investing/trading real money) in this contest. If my strategy affects the strategy of others, that is certainly no fault of mine.
I don't know what will happen in the contest. My stock might blow up and I'll wind up in last place. One thing I know for sure is the market humbles everyone from time to time. That's ok. I'm just enjoying the ride. fwiw

[Dan Mezick]

It's not over yet. It just started.

My intention in kicking this off is to bring the trading game to the attention of some of the poker players who are experiencing some success in the card game.

I'm hoping that the leaders who eventually emerge (Wildwood et al) will share some keen insight about trading philosophy, psychology, working beliefs etc. specially working beliefs that support effective trading. Successful trading technique is definitely NOT about money per se.

5k is 1% of your account. This is a normal fluctuation percentage per day in an actively traded account.

You are definitely not out of this thing.

[player24]

[ QUOTE ]
[ QUOTE ]
Perhaps the best analogy would be play-money poker. If we all sat down at the table with play money, some of us would (conceivably) play according to our 'normal' discipline - viewing the game as a test of skill. In contrast, some of us would (probably) play like maniacs, taking ill-advised risks, devaluing skill and making a mockery of the competition.

[/ QUOTE ]

Hi player,
Thanks for your reply. I would like to add that, in my opinion, I think gold might trade in the high 400's by the end of this year or early next year. The stock I'm trading is a Canadian gold junior that is unhedged, has no debt, and has good management in my opinion. If I'm right about the gold price direction, this stock might not be as ill-advised and risky as you think. Also I have done nothing to mock the competition or devalue skill (I do have 25 years of experience investing/trading real money) in this contest. If my strategy affects the strategy of others, that is certainly no fault of mine.
I don't know what will happen in the contest. My stock might blow up and I'll wind up in last place. One thing I know for sure is the market humbles everyone from time to time. That's ok. I'm just enjoying the ride. fwiw

[/ QUOTE ]

I'm not suggesting that your stock pick is ill-advised. Nor am I suggesting that your game strategy is ill-advised. I'm simply suggesting that your concentration strategy would be ill-advised under any circumstances in which there is pain associated with losing (like in the real world).

My comments were intended to be provocative, but not critical of you. You have my apology for being offensive.

You certainly have more real world trading/investing experience than I. I'm going on 20 years - but I won't make it to 25 - going to retire rich by then.

[wildwood]

[ QUOTE ]
I'm simply suggesting that your concentration strategy would be ill-advised under any circumstances in which there is pain associated with losing (like in the real world).

[/ QUOTE ]
Very True. Here is my post in Dan's original thread: [ QUOTE ]
Hi Dan,
This could be a fun deal. Virtual trading equals playing poker with play money. However, if someone wanted to improve their money poker game then market trading with real money works better because now all the issues of fear, greed, tilt all come into play. I've never been a great fan of paper trading because the emotions don't factor in. fwiw

[/ QUOTE ]