Has anyone downloaded and played the "Secrets of the Master Trading Game". This game is free for 7 days from the www.iitm.com website. Its all about position sizing and expectancy. The goal is to increase your equity by 50% or more by the end of 75 trades knowing you have:
- 55% chance of winning a $1 per share
- 5% chance of winning $10 per share
- 35% chance of losing $1 per share
- 5% chance of losing $5 per share

I've played twice now and haven't been able to pass Level 1 yet. In one game I risked 1% of my position size (initially $10k) every time and my risk per share (1R) was 25% of the stock price. Curious to know if you have played what was your strategy ?

Maggie

p.s. thanks Larry for recommending the Safe Strategies book - GREAT book !

Maggie,
I did download it and play it. Played it a lot for a week but decided not to buy it yet. I'm not sure I understand what you mean by 1R being 25% of the stock price. I notice that your expectancy numbers are in $ and not R. It seemed pretty easy to make it as far as they let you go when I forgot $ and concentrated on R. Risking 1% of capital per trade in a positive expectancy system worked fine. I'm downloading it again to check it out.
h

Maggie,
I see what you mean. You have to pick an amount that you risk per share to set your stop, but that's not the R. The R is on the right hand side and it requires you to have both an amount per share to risk and a number of shares. The product of those two numbers will be R and in your case no more than $100. Here's a way to check to make sure it will work. Pick $2.50/share and 50 Shares, that will give you 1R. After each just keep hitting return until the % of total equity risked on the right isn't 1% anymore. Just adjust the number of shares to make it 1% and hit return. I know it's not realistic, but I think the $/share doesn't go into the win/lose calcuation at this level.
Hope this helps,
h

Thanks Howard. What you recommended worked for me and I passed level 1.

Previously, I was adjusting the "Shares to Buy" and "Risk $ Per Share (1R)" everytime depending on the share ask price. I was not keeping one of those variables consistent, but was always risking 1% of total equity. Actually I'm going to go back and analyze what I was doing and compare to what you recommended so I completely understand.

Thanks again.
Maggie

i played this game a while back - i don't remember all the details but - i did my best when i kept my dollar risk at 1.5% of my total account on EVERY trade.

i was able to get to the top level of the free section. i never bought the whole game.

-ja

Yeah, over time you definately do better with more than 1% risk. The expectancy of level 1 is greater than level 2. If you put your own system in and you risk too much, you get a good education.
Maggie, the way I did it isn't realistic or any way to do it in the real world, it just shows you that the game works

I dowloaded and played the game. The first few times I could not win, but after a while I realized that position size and % of capital risked is a better approach than just percentage risk on any single trade.
Now it is very easy to win. This approach should help my trading. There was a line somewhere in his book
that described the difference between a gambler and an investor. An investor looks at what is probable and
a gambler looks at what is possible.