I have an account on smartstocks.com and they start you out with 1,000,000 dollars. after 2 months i made 30,000,000 dollars. does this show a good indicator that i could do real well investing in stocks or is this all very unaccurate?
On May 21, 2010, In stock market simulation, by admin
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This is investment advice that I received from a very smart, well educated professional that I trust. I later heard this same advice from Warren Buffet!
There are literally thousands of mutual fund managers that get paid 7 figure salaries. At best, there are about 10 or 12 that consistently match or beat the major indexes (DOW, S&P, etc.). The odd of you doing that well are extremely low.
Your best bet is to invest consistently over time in a mutual fund that has little or no fees and is designed to match an index. There are several good ones out there such as some of the Vanguard funds.
Check out the Kiplinger top 25 fund list.
Did you have a plan, and did you follow it? Or did you just get lucky?
Did you make money in this recent Bull Market rally, or did you trade through a Bear Market also? Everyone can be a professional stock picker in a Bull Market.
Make it as realistic as possible: do you have $100,000 to invest?
Did you use stops, or prevent excessive drawdowns? How many losing trades in a row? This will show maximum drawdown.
After 100 trades, following a trading plan, you will have a mere chance.
Most people can make money on a simulator, but can rarely replicate their success with real money, mostly because they trade differently with real money. Try to make your simulator trading exactly as you would trade with real money, or it is just a game.
Well done!
If you have done so well in the game, this shows that the method, technique or strategy works. If the game is relying on real market data, then you are all ready to trade the market for real.
However, please take note that when your money is in the market, emotions will kick in so you got to learn to manage that. This is something that the game will never help you master but you have to learn it yourself through trading real.
Hope this helps. All the best!
Sounds like you were in Las Vegas and hit big at craps. I know nothing about that website but does it give realistic and actual market prices and lets you play with fake money. Hmmm, or is it a come on and designed to get your interested and then take your real money. I have no clue. But be careful, your results do not appear to be realistic, no body 30x their money in two months. If you had doubled it you would be doing great. So be very very careful before you give anyone at this site any money. If you are determined then start out with $1000 and when you loose that quit. Or if you start with a $1000, and build it up, after you make back your first $1000 then withdraw it, and then have all the fun you want on your earnings. But let me warn you just once more, playing their game may just be a game that you got luck at playing. Or it could be a scam and comeon to rip you off.
Sorry. It’s meaningless.
My guess is that you only bought stocks long and didn’t have any short positions. We are bouncing off of a major market crash and everything was shooting up these past few months. It was simply a good time to be long. Two months doesn’t prove anything.
Another problem with simulations is that you know deep down inside that you aren’t going to suffer because of your mistakes if you lose. It’s not real money. This distorts the decision making process.
Finally, professional money managers think a 20% annual return is great and 40% is huge. Your results translate into 36000%. Reward follows risk. This kind of return implies that you went way out on a limb and it worked out. That’s called “being lucky”. Do this too often and you will be broke.
I really think you made a modest capital gain (3 percent in two months) in a generally positive market. Real dollars change your psychology in investment. I sincerely that you consider whether you want to be an investor or a trader. At this point in time, it seems everyone is trader rather than an investor. I would discourage you from jumping in with both feet. There are several excellent answers already given by the other responders. I kind of feel that you are over-reading the results of your stimulation trades.
No, such games would only be accurate indicators of real world performance to the extent that (1) you invested an amount of money you could actually invest in the real world and (2) you executed the game several thousand times with similar results.
While it isn’t true that any moron could make money starting with a million dollars, it is true than any single 3 month performance could be 100% do to luck (or 75% or 83% or 55% or 98%, etc). To eliminate the luck from the alpha (pure added value) you would have to run the simulation under several dozen scenarios several hundred times each.
That’s impressive, but remember that stocks were rallying for the last 7 months, and that the rally may not be so strong next year. When people play stock market simulators they tend to be more aggressive because they have nothing to lose. Remember it’s your money.
Good Luck!
Emotions play important role in stock-market investing. when real money is involved emotion of greed or fear have a major impact.So if you are a disciplined trader, you can start with single trades or small trades.
Yes you seems to be good trader so strat with real money and earn money with your skill but just carefully make your trade b’cause its your real money.
Happy Trading.
It is neither accurate nor inaccurate indication of how you would perform in real life. You could start with some (real) money, and apply the same strategies as you did in the game, and see how it goes.
It’s amazing that thomas p has any money since he can’t do arithmetic. 30 million gain on 1 million invested is 300% not 3%
I did well playing Monopoly. Should I now go out and start buying properties?
Moral of story: Learn the markets, the economy, wall street, what’s in, and what’s not. Read current business magazines, not old know-it-all books. Watch CBNC regularly.
hi there !!
yes you should invest in real stock market with real money. But before that, you should do some home work and some analysis and then go ahead. Understand the market movements, trends in the stocks etc…
first trade with real money which u can affrod to lose [may be a month expense for u]
There is only one way to find out. Open an account and give it a try. Don’t expect miracles though.
It is only a game. You shouldn’t invest in the stock market for the real money. I am aged 86 and have been living this International scams of real estate and stock for the past 65 years. I personally know investors have lost ranging from HK $ 10k (HK$ 7.8 exchanges US $1) to ten millions in the past five years through the bull and bear markets. There were two had committed suicide for had lost almost every thing and became flat broke.
http://en.wikipedia.org/wiki/Stock_markets#Short_selling
http://www.investopedia.com/university/stocks/stocks4.asp
I think you should learn about the stock market rules and behavior. The current bull market is not only with support by the US monetary policy based on the Keynesian’s approach of macroeconomics which had caused the historical great depression twice. Sooner or later, North America, Europe will not pump money into the stock markets and withdraw those stupid stimulus programs in the stock market. Then another historical crash will be followed. Dow Jones index will probably decline to 4,000 instead of 10,000, the sooner the better. Can you recall what had happened to one year ago bull market? Yes, there were quite a few lucky investors did make a lot of money. The final records have provided a clear indication that most of investors were losers. Further more, during the Dow Jones surged rapidly and followed by the Hong Kong Heng Seng index and the oil price. By that time, many African infants were starved to dead as showed on TV by that time. The bull market is the indirect killer to the third world. Although many investors did make money for a while, finally most of them were losers. Well, its your money. Every thing is up to you.