|
The
Position
Sizing™ Game 4.0
Van Tharp's New Trading Simulation Game
For the
first time since 2002, Dr. Tharp has updated his Position SizingTM
Game!
Download
Levels 1-3 for Free
What's
New?
New Screen Designs: The game’s new “look and feel” makes it simpler to play, easier to understand, and more like what you are used to seeing when you trade.
Realistic Mode: Play the game at whole new level where slippage, commissions, taxes, and trader mistakes eat into your equity — just like real trading.
Track Drawdowns “Playing” Your Own System: “Play” your own trading system in simulation mode and the game tracks the drawdowns for you. Get some ideas about what your system’s drawdowns feel like, how deep they might get, and how long they might last.
Easy-to-Read Instructions and Help Section: The easy-to-read instructions and extensive guide help new players learn the game faster and provide some position sizing ideas.
Works on New PCs: Play the game on any Windows Vista or Windows 7 PC (or on a Mac operating in Windows mode). Also this version still works great in XP.
Hands Free Updates: The game now automatically checks for software updates so you will always run the most updated code for the version available.
The
feedback on all of the improvements from our beta testers has been
glowing. We took a lot of time to make the game an excellent
teaching tool as well as a fun activity. Based on the initial
feedback, it looks like ”Job Done”.
What's
the Game About?
While
people always look for "real" secrets of top traders, they
tend to look in all the wrong places and at all the wrong things.
To so many traders, success seems to come from finding the ultimate
stock picking methods or a magical trading system with 80%+ winning
trades. Let me be clear about what my research has proven to me:
Picking
the right stocks has nothing to do with trading success and neither do
amazing trading systems with high percentage wins.
How then do
you become a master trader? The Market Wizards agree that
there are three keys to trading success:
(1) Follow
the golden rule of trading—cut your losses short and let your
profits run.
(2) Master
the part of your trading that tells you how much.
(3) Develop
the discipline to follow both of those elements.
The
Position Sizing Game helps you with all three of these keys!
First,
you start to learn to answer the question “how much?” through
position sizing™ strategies.
Second,
playing the game helps you learn how to let your profits run—and
protect them as well.
Third,
playing the game using your own system’s results in simulation mode
allows you to practice proper position sizing for your own trading.
Trading simulation helps you develop the discipline to follow
the other two keys for trading success.
Furthermore,
you can master these three keys – without risking one cent of your
valuable capital in the markets! Tuition
there is a lot more expensive!
Game
Play
The overall
objective of the game is to make a 50% return in each of the ten levels
without going bankrupt.
As
with real trades, there’s only one position sizing question to
answer as you play the game: “How much do I risk on each
position?” You establish your risk amount in two ways: through
the initial stop price (your risk per share) and by how many shares to
buy (which determines your total risk). Do this well and you are
on your way to profits. Do it poorly and you blow up your
account.
The
first levels of this game teach you position sizing strategies and the
importance of large R-multiples. What you win or lose will be
expressed as R-multiples. If
you aren’t familiar yet with how R-multiples work, the game is a
great way to learn it hands on. You
even get exposed to some more advanced systems concepts like separate
probability statistics and expectancy statistics. (Learn
more about expectancy verses probability.)
Sample of screens in the game
As
you progress, the game changes systems you trade so you can experience
what it’s like to trade different probabilities and expectancies.
Beginning with Level 5, you have the option of going long or
short on a trade, which means that you can go with the probability or
with the expectancy. Hopefully, you'll learn how dangerous it is
to bet against the expectancy, even though you get to win (or be
right) more often.
In levels 6 through 10, you have to earn your big R-multiples by letting your profits run on a winning position. Losing trades happen quickly, but winning trades take time to develop fully. When a winning trade starts, it is probably just a 1R win but chances are that it will continue to be a winner as the trade progresses. Once a winning trade starts, you have to decide how much to risk—time period by time period. Do you want to risk a portion of your profits for a further gain or all of your profits for a shot at the moon? In the process, you learn not only about position sizing strategies but your emotional experiences along the way, which helps you exercise and develop your discipline.
To complete the game and
make it through all ten levels, you have to prove your proficiency in
four key principles: (1) the importance of R-multiples; (2) the
difference between expectancy and probability; (3) letting profits run
without letting them escape; and (4) using position sizing strategies
to make sure you have a low-risk trade. The Position Sizing Game
is designed to drive these principles home by giving you the
experience of making (or losing) money in a game environment where
losing is safer. Through the game, you begin to understand these
principles experientially without having real money at stake. My
book, The
Definitive Guide to Position Sizing, explains all of these
ideas conceptually if you are interested.
Recommendations
Some people
play this game once or twice, shoot for the moon and try to make a
billion in their equity. While that might be fun, you could
choose to play the game in a way that helps you earn equity in
your real account.
You get the
most out of the game by following these steps:
1.
Play the game multiple times.
2.
Experiment with different position sizing techniques.
3.
Apply the position sizing lessons you learned finally in
simulated game mode trading your own system.
Follow that
process and you internalize the three keys of success identified by
the Market Wizards.
Then find are ready for the final step –
4.
Apply the position sizing lessons you learned in simulation
game mode in your live trading and the effect of that knowledge on
your real equity.
You won’t
find any stock picking tips or amazing systems in this game, only
seeds of trading success that you can nurture into reality.
My game gives a new twist to the old saying “Play to Win.”
Levels
1-3 are free, so give it a try!
 "I have found the game to
be very
helpful, and I’ve played it over and over again with different money
management programs. It’s one thing to read about the mind traps
that traders create regarding probabilities and the gambler’s
fallacy, or to read that random number series can contain protracted
winning and losing streaks, but playing a simulation that feels like
trading really drives home the lessons about disciple, systems, and
expectancy. Playing the game over time helps reinforce the idea that
you get the same probability distributions as everyone else, and that
your trading plan will need to address this fact through money
management, position sizing, trading rules etc.
"I have found that it also helps you
change the way you frame the activity of trading because the game
focuses on systems results and strips away entries, setups and the
other false control illusions that traders inevitably get wrapped up
in. At first it didn’t feel like trading because it didn’t focus
on the things that I did when I traded, but gradually it dawned on me that I might not be
focusing on the right areas. The opportunity to view a trading system
as the random distribution of hundreds or thousands of independent
trials changed my view about my ability to 'change the markets,' and focusing on maximizing system outcomes has given me
a fresh perspective on trading, systems development, and risk." —Alan
Stevens, Boulder CO
|
 |
 |
Van
Tharp Institute
IITM, Inc.
www.iitm.com Site
Map
©1992-2010 All rights reserved |
102-A Commonwealth Court, Cary NC 27511 USA
Toll Free: 800-385-IITM (4486)
Tel: 919-466-004346. FAX:
919-466-0408
Contact Info.
Email: info@iitm.com
|
|
|
