Richdad II Officially Made, Rules Available
This morning I created the actual contest on Investopedia.com. The actual official name is going to be Richdad II, and it is a private contest. Once I get your submission form via email (registration starts tomorrow and goes for two weeks) then I will send you the password and you can join. If you do not register by the start date you will not be able to join; the contest will not actually allow any new users during the contest. With that being said, here are the rules and my thinking behind them.
Richdad II Competition Summary
Group Manager ----- Blain Reinkensmeyer
Access ----- Private
Accounts ----- cash
Starting capital ----- 100000
Currency(ies) ----- USD
Starting date ----- 5/1/2005
End date ----- 8/15/2005
Allow late entry ----- Disabled
Daily Volume ----- 0.1
Minimum Price ----- 1.00
Commision - Market ----- 11.99
Commision - Limit ----- 11.99
Cash Interest ----- 0.02
Market Order Delay ----- 20
1. Buying on Margin, Options, and Shorting will not be allowed. The last contest had shorting and margin enabled and this caused issues because we could easily make huge gains. You cannot effectively relay how these abilities would work in real life. Within the game there are no margin calls and there are no minimum balance requirements. As a result, these features will not be allowed.
2. "Daily Volume ----- .01" means that you can only trade 10% of the total volume on the day for any given stock. Basically what this prevents you from doing is buying 40,000 shares of a stock that only trades 400 a day; in real life this would not be possible.
3. "Minimum Price ----- 1" means that you can only buy stocks over $1 a share. In the last contest this number was 3 but in real life $1 stocks do exist and can be profitable in traded right. There will be no trading of penny stocks though, until you start trading in real life at least ;) .
4. Commision Market and Limit means that it will cost you $11.99 per trade. Limit? Yes!! I am very excited to say that you can do limit orders and put stop losses, etc on your shares!! This is very realistic and if you track my http://stocktrading101.blogspot.com/ blog then you will know that I have used these before and that they are important.
5. Cash interest means you will get 2% interest on your available cash.
6. Market order delay 20 means that once you place an order it will take 20 minutes before it is processed. This insures you get the actual price at the time and takes away the advantage of users who have real time quotes.
Other rules include no after hours trading or pre-market trading. Try placing an order after hours and you will be informed of the error. This ability was a huge reason why people (including myself) pulled away gain wise because you can use it to your advantage horribly. This contest, you will be able to sell a stock the same day if you want. I do day trade and I think that this is something we should have. It was asked by FirstConsul if there would be a diversification rule meaning you can only put a % of your portfolio in one stock. No, there will be no rule and you can diverse your money any way you wish. I will put my whole account into one stock if I feel good about it and you should be able to as well. If you want a diversifcation rule make a mental one. I also want to say thanks to FirstConsul though who is the person who told me about Investopedia's stock simulator. Without him we would be on the slow, sluggish, non-realistic stocksquest simulator; thanks man.
I think that covers the rules. If you have a question just post a comment on it since I did probably forget to clarify something. Otherwise, the registration form will be available tomorrow and enjoy your weekend.
To the future,
Richdad II Competition Summary
Group Manager ----- Blain Reinkensmeyer
Access ----- Private
Accounts ----- cash
Starting capital ----- 100000
Currency(ies) ----- USD
Starting date ----- 5/1/2005
End date ----- 8/15/2005
Allow late entry ----- Disabled
Daily Volume ----- 0.1
Minimum Price ----- 1.00
Commision - Market ----- 11.99
Commision - Limit ----- 11.99
Cash Interest ----- 0.02
Market Order Delay ----- 20
1. Buying on Margin, Options, and Shorting will not be allowed. The last contest had shorting and margin enabled and this caused issues because we could easily make huge gains. You cannot effectively relay how these abilities would work in real life. Within the game there are no margin calls and there are no minimum balance requirements. As a result, these features will not be allowed.
2. "Daily Volume ----- .01" means that you can only trade 10% of the total volume on the day for any given stock. Basically what this prevents you from doing is buying 40,000 shares of a stock that only trades 400 a day; in real life this would not be possible.
3. "Minimum Price ----- 1" means that you can only buy stocks over $1 a share. In the last contest this number was 3 but in real life $1 stocks do exist and can be profitable in traded right. There will be no trading of penny stocks though, until you start trading in real life at least ;) .
4. Commision Market and Limit means that it will cost you $11.99 per trade. Limit? Yes!! I am very excited to say that you can do limit orders and put stop losses, etc on your shares!! This is very realistic and if you track my http://stocktrading101.blogspot.com/ blog then you will know that I have used these before and that they are important.
5. Cash interest means you will get 2% interest on your available cash.
6. Market order delay 20 means that once you place an order it will take 20 minutes before it is processed. This insures you get the actual price at the time and takes away the advantage of users who have real time quotes.
Other rules include no after hours trading or pre-market trading. Try placing an order after hours and you will be informed of the error. This ability was a huge reason why people (including myself) pulled away gain wise because you can use it to your advantage horribly. This contest, you will be able to sell a stock the same day if you want. I do day trade and I think that this is something we should have. It was asked by FirstConsul if there would be a diversification rule meaning you can only put a % of your portfolio in one stock. No, there will be no rule and you can diverse your money any way you wish. I will put my whole account into one stock if I feel good about it and you should be able to as well. If you want a diversifcation rule make a mental one. I also want to say thanks to FirstConsul though who is the person who told me about Investopedia's stock simulator. Without him we would be on the slow, sluggish, non-realistic stocksquest simulator; thanks man.
I think that covers the rules. If you have a question just post a comment on it since I did probably forget to clarify something. Otherwise, the registration form will be available tomorrow and enjoy your weekend.
To the future,
posted by Blain Reinkensmeyer at 11:22 AM
1 Comments:
Cool Im really excited about learning more about the stock market.Im 14 and I want to get started now,Im still learning all the basics now though and reading through tutorials.
Oh yeah and about that thing about trading after hours, Im sorry but I kinda have to do that because I live in New zealand and the stock market is open at 2 am. I got up last night at 2 am and went on though but when the holidays end I wont be able to, sorry!!
Anyway goodluck to anyone who is in the contest!!!!!
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