Is your competition style different from your real trading methods?

lehayes · #1 (**permalink**) 03-16-06, 06:08 PM

Do you trade in the competitions the same way you trade in your real investing portfolio?

Would you really take the same risks?

What do you do differently?

Why should you trade differently in a competition than you would in a real portfolio?

Imagine doing real trades at the same velocity you do with competition trades, would it change the way you live your life?

Stocktrading101 · #2 (**permalink**) 03-24-06, 02:32 PM

Do you trade in the competitions the same way you trade in your real investing portfolio?

I would say yes for the most part. It can be difficult because of the capital difference imo.

Would you really take the same risks?

I did for a long time, till I lost my whole portfolio lol

. Now a days I feel I am a little more precise. Gotta learn somehow I say.

What do you do differently?

Hold stocks longer, dont cut losses short like I do in real life. I think that is natural though, doesn't everyone feel like me?

Imagine doing real trades at the same velocity you do with competition trades, would it change the way you live your life?

That is a deep question, and yes it would and did. I would be interested to hear some other replies to these questions.

Have a great weekend,

Yee Sian · #3 (**permalink**) 07-04-06, 10:44 AM

BuMp, i would be interested to hear more from people who trade in real life too.

Blain, has your response to any of the questions changed?

Lehayes, what about you

?

lehayes · #4 (**permalink**) 07-10-06, 06:46 PM

At first I thought I would and that I did trade the same with real trades as I did with competition trading. In fact, I had a frustrating time trying to handle the slower pace of my real trades than my competition trades. With competition trading you are focused on getting the large amount of cash in the shortest amount of time then accelerate that process as fast as you can to be the leader. Real trading there are limitations that prevent this from happening. For example, if you are a level 1 trader, you are limited on how many trades you can take in a specified number of days. If you are a level 4 trader and you only have $1500 in your account, again you are limited to how many trades you can take in a given time line. So in some ways, you are trapped into a time requirement when real time investing, in competitions you are not.

Now my trading style still remained the same, I just had to do it more frequently in the competition. Did it make a difference, not really. I still earned the gains I would have doing it the normal way, the difference is that it would have taken me longer to acquire the same profits in real trade.

In addition, when you do enter the real trades, there are subtle events on entering an investment that will generate responses of the others investing that would not happen in a competition trade. For example, if you are holding a small stock say $1.50 per share and some one comes along and dump $100k on it, would you think this is a good time to get out? I have seen this happen in real life and the event of this happening pushed the stocks price really high, so I bailed out and made my goods. Now in the competiton I would be the $100k guy. If I dump $100k in a real trade, you can bet the little investors are going to get out while they can. Events like this can really change how the direction of the investment will go. This is also largely why a big investor takes more time to move into an investment than a little investor. Little investors can get in and out without much of a detection.

Yee Sian · #5 (**permalink**) 07-11-06, 12:21 PM

Thank you for that insightful post

Seldom do we notice how large our positions in certain stocks in a competition may be, and yet, we take for granted the fact that this wouldnt have an effect on the market in real life. "This is also largely why a big investor takes more time to move into an investment than a little investor. Little investors can get in and out without much of a detection."

"With competition trading you are focused on getting the large amount of cash in the shortest amount of time then accelerate that process as fast as you can to be the leader. Real trading there are limitations that prevent this from happening." Yea, I get ya

Also, the amounts we trade in real life is likely to be much smaller than our accounts in the competition. This may affect the way most of us trade, not everyone will get the luxury of working with 100k right from the beginning. Or operate as a level 4 trader.

Quote:

So in some ways, you are trapped into a time requirement when real time investing, in competitions you are not.

Sorry? I didnt quite catch this part. Did you mean it the other way round?

My own input: is it true that in a competition, you are more concerned with the velocity of your money? While you may make more money in this period of time, you have simultaneously increased the amount of risk you are exposed to. On the other hand, you are working to lower this risk in real life, to preserve your capital should the stock movement be against you?

lehayes · #6 (**permalink**) 07-14-06, 06:52 PM

No, because in a real time trade, you are limited by time which is set by the traders level you are at and the amount of cash you have on the account. In the competition you are not limit by time, but you are pushed for getting as many trades as you can in as little time needed to be successful quickly.

lehayes · #7 (**permalink**) 07-14-06, 06:58 PM

Increasing the risk doesnt come into play in the competitons simply because you have to take bigger or faster shots at the market. Risk is set based on the level of protections you set, duration in the market, and strength of the security you are investing in. The only time that "time" plays a part in risk is when you are dealing with options.

Now risk wise, I took the same level of risks in the competitions that I took in the real trades. It would be foolish to push for more risk in either case, on one hand, higher risk will increase your losses in a competition, on the other hand, increased risks will increase your losses in your cash account.

The increased velocity of your money in the competition is from taking less time in an investment. In fact, if more people did this in their real time, (assuming no violations of SEC policies) they would probably perform better on an average.

lehayes · #8 (**permalink**) 07-14-06, 07:34 PM

Increasing the risk doesnt come into play in the competitons simply because you have to take bigger or faster shots at the market. Risk is set based on the level of protections you set, duration in the market, and strength of the security you are investing in. The only time that "time" plays a part in risk is when you are dealing with options.

Now risk wise, I took the same level of risks in the competitions that I took in the real trades. It would be foolish to push for more risk in either case, on one hand, higher risk will increase your losses in a competition, on the other hand, increased risks will increase your losses in your cash account.

The increased velocity of your money in the competition is from taking less time in an investment. In fact, if more people did this in their real time, (assuming no violations of SEC policies) they would probably perform better on an average.