Saturday, October 4, 2008

Pro-Trader Simulation Game

I develop Pro-Trader as a simulation game to teach students in wealth management about trading in the real world environment. I hope that it is also suitable for investors who wish to develop the skill of making the right timing in their investments.

Pro-Trader show the prices of four financial products, e.g. stock, bond, currency, gold. The prices move in respond to economic and political events. The prices are made as realistic as possible, to follow the trends in past years. This allows the player to develop an insight into how the events affect the prices of certain products.

The investor in the financial trading world knows that the market prices do not follow any definite pattern. The actual prices depend on the perception of the players at any point of time. If there are more buyers, the price moves up. If there are more sellers, the price moves down.

Generally, the players will react according to their past experience. For example, if interest rate for a currency goes up, the currency should also move up. Generally, higher interest rate leads to lower stock prices.

At any point of time, the prices are influenced by several events that occur simultaneously. Some market participants take a few hours or a day to react to a market event. These behaviors are factored into the simulated prices.

Each contract represents an investment of $100,000 X price in the financial product. The trader is allowed to enter a long or short position, similar to a trade in the futures market.

The key lessons to be learnt are:

> Study the price trends to understand how the market is reacting to the news
> Be ready to move quickly into your trading position
> Be ready to change quickly, if the trends change or your positions are wrong
> Practice many times, to get a feel of the market behavior
> Learn about the market through this game, before investing your real money

Try this game:
http://www.tankinlian.com/trader

Players registered as at 4 October: 377 players