Here’s How To Get Better at Picking Stocks With Fantasy Gaming
Looking for the best stocks to pick requires tedious research, especially for those trying to profit from short-term trades. If only there were a way to get better at trading without affecting your capital. Indeed, that would make things a lot easier. The fact is to truly profit from trading, you need to learn how to pick the best stocks. The risk-free way of doing this is by buying fantasy stocks!
In this article, you will learn how to become a better trader through fantasy stocks.
Choose your trading strategy
In simple terms, a trading strategy is how you intend to approach the market. Do you have short-term or long-term ambitions?
Many people lead busy lives and are not able to tolerate high-risk investments. If you fall under this category, then short-term trading may not be for you. Instead, you’ll feel much safer investing your money in stocks and crypto that will increase in value over time. This way, you sleep peacefully at night because no matter the crash, your stocks will rise, and you will reap the rewards of your patience in the future.
But, if you know, the thought of Bobby Axelrod excites you, and you dream of scalping the crypto market like a skilled daytrader, then short-term trading is for you!
You should know that short-term trading is risky, and there is a high chance you can lose your capital. Yet, there are many successful traders out there. Why is this? Making losses from trading is a normal occurrence that happens to most traders. But by sticking to certain trading principles, rules, and strategies, you will make more profit on stocks. Soon enough, your gains will outweigh your losses, and then my friend, only then will you consider yourself a successful trader.
I always recommend new traders and expert traders to explore the world of Fantasy stock gaming. I mean, is there any other way you can practice stock trading without sustaining huge blows to your capital? I didn’t think so.
If you’re looking to Moon in the next bullish season, start picking fantasy stocks on a game like StockBattle, Wall Street Survivor, and TradingKart. You can pick stocks or crypto to exercise your short-term trading strategy without any risk to your real capital.
How to Pick Stocks Like a Pro
Let’s delve into the mind of one of the greatest stock market geniuses of all time, Warren Buffet. He advises individuals, investors, and corporations alike not to invest in individual stocks but to seek the very low-cost S&P 500 index funds and invest in them.
Now, why will he say so? After closely analyzing his advice, he’s right! Investing in individual stocks is like putting all your eggs in one basket. How can you bet on one company’s success against the whole stock market? The chances of that happening are slim. Although not impossible, there are still traders whose approach is to gamble—”go big or go home.” While this may work for some, it may not work for you. It is imperative that you understand the best practices for trading to help you make better gains.
Yes, Buffet is right. But investing in “Low-cost S&P 500 indexes” will require you to sit on your investments for a few years before seeing significant gains. This advice is great for those with long-term positions. But, what about the risk-takers? Those pumping for short-term trades? Well, guys, buy Individual stocks! There are game-changers on the scene every now and then—a company or Stock on the rise that outperforms older and more valuable companies—a prime example is Amazon and, in more recent years, Tesla. We just need to learn to spot them in time.
According to Yahoo Finance, Tesla had a stock price of $60 back in July 2018 and now sits comfortably at $680 as of 13 July 2021. So, that’s over 11x in profit for Tesla stockholders since 2018. Well, if that isn’t wholesome. Early holders must be having a thrill right now! The truth is selecting individual stocks can be just as great as buying index funds. However, first, you must decide on your trading strategy. Short or long?
The fact is choosing Individual stocks requires more analysis than S&P 500 index funds. With the S&P 500 index, you are betting on the performance of the top-performing 500 companies on the stock exchange. The odds of your funds doing well are much higher, and the risk is lower. My guess is this is why Buffet recommends these Index funds.
How to Value a Company’s Stock
When picking individual stocks, It’s not enough to name big companies like Tesla, AMC, Coca-Cola, etc., and invest in them simply because they are popular. You will not profit in the short term. Picking individual stocks from the fold requires deep valuation and analysis of the company. The best way to evaluate a company’s future stock price is to:
- Analyze past financial statements: During stock valuation, you’ll want to analyze the companies past income statements to be sure the company in question is debt-free. For example, a famous company like Toys R Us, ticker name TOY, was terminated from the Securities and exchange commission in 2018 due to £15 million in unpaid taxes. I shudder to think how the stockholders felt after losing their investments.
- Present Company Management: A company’s structure and management have everything to do with its future. Even if you pick the Stock of an innovative company, a simple case of mismanagement can run the company down. For example, Enron Corporation was an American energy company based in Houston, Texas. The company was worth over $40 billion as of the year 2000; however, mismanagement led to the company’s downfall.
It is very important to value a company’s stocks before investing. After doing your valuation and you’re sure a particular stock will rise, pick your top five stocks on a fantasy stock game like StockBattle or Wall Street survivor and play a short game to see if your analysis is correct. If it is, then you’re ready for the big leagues!
Why you Need to Have a Diversified Stock Portfolio
A wise trader knows that the key to success in the stock market lies in possessing a diversified stock portfolio. Why is this important? Well, because some industries may take a fatal hit on an economic level, which will result in their stocks plummeting. Just imagine if you picked an individual stock in the tech industry, and all of a sudden, the tech industry goes through a vicious change prompting companies to alter the way they operate. This apparent dysfunction will cause a downturn in all tech-related stocks. A trading principle states, a diversified portfolio should not contain more than 5% of a particular stock or sector. Sticking to this simple strategy can help you minimize losses and maximize your profit on stocks.
The same goes for having only cryptocurrencies in your investment portfolio. What if Bitcoin (BTC) goes through a major correction and affects all the other Altcoin? You’ll be in the red with all your investments!
How to Earn on Short-Term Trades Using Fantasy stocks
So, you’ve decided your trading strategy is short-term, and you are picking individual stocks and crypto. Great! Short-term trading requires accurate predictions for you to be able to profit from stocks.
First, you will need to do your analysis on the stocks of your choice. Once you’re certain of your stock picks, you can invite up to 10 other friends or compete with top traders on a game like StockBattle. The NASDAQ pool commences once the stock market opens, so you can prepare your portfolio ahead of the open if you’d like. Keep your portfolio simple. Remember you’re practicing stock price predictions.
Lastly, select your top five stocks or crypto and play a 15-minute game against price movements in the market. If you come in first or second place, you’ll earn a couple of dollars for your accurate predictions. Pretty neat, right? Also, You get better at picking stocks and improving your trading strategy.
Fantasy stock trading holds many advantages, including helping you to practice your trading knowledge in real-time. The biggest perk is you don’t have to risk your money while learning how to trade! It teaches you money management. You can practice day trading strategies, compete with top traders, and much more. Once you’re ready to master stocks and crypto like a pro, sign up for a fantasy stocks game.