Simple game about market timing

[nuisance]

Pretty neat. Can you sell and buy at the right time?

This game will show you just how foolish it is to sell stocks right now - Quartz

FWIW, I totally failed.

 

[pb4uski]

I got lucky.

The $10,000 you invested turned into $24,498. If you hadn't made any trades you would have made $1,494 less—leaving an ending balance of $23,004. You took a risk and it worked out, but there's no guarantee you could do it again.

 

[Fermion]

Completely stupid game. You get like 2 buys and 2 sells then it makes you ride it out?

What trader only trades 4 times in a 10 year period

Also I know high frequency trading is not possible by a human, I think I could do better than the 20 day delay in trade execution from when my eye sees the chart to when it registers my click of buy or sell.

Try again.

 

[NW-Bound]

Market timing is tough, no questions about it. But in real life, traders have other cues to consider: P/E, GDP growth, unemployment and inflation numbers, interest rate, Washington policy, oil price, political situations, etc... And last but not least, the "Wheee" signal.

 

[NW-Bound]

Come to think of it, if the game showed the bond return alongside the stock price, that would be all most buy-hold people need and use to rebalance.

 

[Ronstar]

I have a neighbor that is a day trader. I usually see him early mornings riding his bike. I haven't seen him at all this week. I hope he's ok.

 

[Fermion]

Another good point about the game. When you execute your one buy that you are allowed in a 10 year period, your money just sits there and doesn't grow at all. Some of the 10 year periods they use, bonds were paying 10% and one year CDs were paying 5 to 7%

 

[photoguy]

Right. This is sensible because there's no exogenous variables that might impact your buy/sell decision.

 

[hesperus]

I have a neighbor that is a day trader. I usually see him early mornings riding his bike. I haven't seen him at all this week. I hope he's ok.

lol, me too

 

[Sarah in SC]

I "won" by never executing any trades. But I think I got a lucky decade. Money tripled just sitting there.
Fun game though!

 

[Fermion]

Like I said, most of the time periods used in the game, 10 year treasuries were paying 6% or even more. Thus if you immediately hit sell and the game let you put the 10,000 into treasury bonds, you would end up with at least $18,000, which beats the market in quite a few of the cases. The author just arranged the game to try and prove a point...the point may be true but his method was false.

 

[Fermion]

What you just saw is exactly how the S&P 500 performed from the week of Mar. 14, 2003 to the week of Feb. 22, 2013.
You beat the market!

The $10,000 you invested turned into $29,847. If you hadn't made any trades you would have made $11,659 less—leaving an ending balance of $18,189. You took a risk and it worked out, but there's no guarantee you could do it again. Why don't you try?




Based on playing this game I now think I can properly time the market...look how much I made compared to buy and hold.

 

[clifp]

I won 3 out of 5 times.

 

[Totoro]

In those other two out of five, how badly did you lose?

 

[clifp]

I don't remember I know 1 win was big,1 tiny and 1 lost was big.

 

[karluk]

I find this game to be quite interesting because, even though it purports to teach a lesson in how foolish it is to time the market, it actually appears to lead to exactly the opposite conclusion. Two serious weaknesses are to allow only a single sell/buy per iteration and to not carry one's cumulative gain or loss forward to the next iteration. I tried the game repeatedly and seemed to beat the market more often than not, but some of my losses were by large margins - to win each iteration it's mandatory to sit on the sidelines after selling, hoping for a large enough correction to allow one to reinvest at a profit. If no such correction happens during that iteration, you're doomed to suffer a potentially huge loss, but you can always try again with the game not remembering the magnitude of previous losses.

 

[nuisance]

Playing a bit more, I've gotten some good results as well.

I agree with the criticisms that this isn't a full simulation etc, but I still think it's neat. It's so tempting to see trends in a graph, and a few rounds of this game really drives home that anything can happen (but the overall trend is up).

 

[Happily Retired]

Got lucky

I had $175k sitting in Vanguard money market fund waiting from our consolidation to Vanguard efforts. Timing of this was perfect to watch the sell off and wait for a sign of a bottoming out.

I guessed right (this time) and bought on the right day.

Woo Hoo!

 

[nuisance]

Congrats, Happily!