Question

Short term volatility without risking your real money.

1. Please describe your trading strategy(ies) that you used on Stocktrak. Describe your biggest emotional ups and downs associated with your biggest trades/positions.
2. While short-term trading requires many hours and large resources to stay ahead of the competition (A.I.-powered trading robots are already here:)), many people still manage to extract a sizable secondary income from the markets. Of course, the landscape is always shifting and what worked last year might not work the next. Given all that, reflect on whether you'd continue with (or start) playing in the markets for the possibility of short-term profits. Do you you think you have what it takes to succeed in the short-term game? If so, do you plan to increase your skill levels through further studying (taking courses, etc.) or hands-on experimentation?

Answer 1

Trading on stock track is more of a learning experience and many a times almost a game as the decisions taken in real world would be really different from what is taken while trading on stock track. Behavioural finance has a huge impact on financial decisions made by people because people do not also behave rationally. Thus investment made in real life scenario with real money has a huge difference from virtual non real money because when a person has rent and bills to pay from hos or her salary, in a volatile market, he will weight the risks more than the possible opportunities. Traders who have managed to make short term gains which can almost supplement as secondary income are generally invested full time in trading with huge investments in wealth and time. Good contacts with people in industry, good quantitative and quantitative analysis skills all help in making gains in financial markets. But importantly, its essential to understand that as per market efficient hypothesis, market prices already reflect all the information. Thus beating the market to make gains may not be an easy thing to do. Market inefficiencies are noticed and used by market participants. In such scenarios usually the faster the person notices and utilizes such market inefficiencies, the more gains he makes. Thus sometimes the gains a person make is a function of his analysis, speed and technique but many times it's a function of pure luck and good fortune.

Thus understanding financial markets, products and financial analysis methods and technologies helps makes sense of the prevailing markets but do not guarantee gains in stock market