Play to win the CNBC Challenge

Ended the contest in the top 2%

2009-01-28T09:51:00.000-08:00

Wow! What a roller coaster ride. I played the contest, but I didn't get in to the top 20 that made it to the finals this week. Now the contest will run another few weeks ending on 2/9/2009. In thinking back over the past ten weeks I wonder what I could have done differently and how I would have approached the stock markets or if I would have experimented as much with my choices.

Let me list a few of the challenges of trading a game like this. First you have to multitask very effectively. You must be able to trade stocks, trade currencies, and complete the questionnaires daily. Just by completing the questionnaire alone for the entire ten weeks you will accumulate $600,000 for the game.

Second, when you trade you must pick a winning sector and load up on shares in that sector. While the 25% rule is fully in effect for stocks it has zero affect on sector investing. So when you bet you want to bet big and have 100% of the million dollars heading in the same direction at the same time.

Third, there are also end of day/real time trading issues. You must execute all of your trades "before" the market moves/opens the next day. You cannot enter trades in real time on this game, so if your signals are saying buy, you MUST buy. My program has always been about confirmation of the markets movement and executing afterwards to catch the momentum. This habit was a detriment for me in this game. On many occasions I would miss the first run up and lose those initial profits.

Fourth, you must be VERY aggressive when it comes to the currency trading. Like Vegas you need to "let it ride" every time and exit at the first sign of loss. The lack of stop losses makes it difficult to operate on autopilot in this game.

Fifth, you must play this game like a job. Nightly research is essential along with following and knowing about announcement and last minute reports. This is is big money, $500K for the winner, and like most things in life while the meek may inherit the Earth, they definitely will not win the CNBC Challenge.

It's not all challenges only. The great part about this game is that there are ten ways to get into the finals, besides being the overall leader. It is easier to become the weekly largest percent gainer, even though you may not have the largest gross amount, while at the same time much more simpler to achieve. For example if you drove your account down to 100K being very aggressive, but you got luck and made 80K you would be up 80% for the week. If you made that same 80K on a 900K portfolio you would be at 9%, huge difference between percent gains.

So how I did I end up?

Strangely enough every single one of my portfolios ended up in the positive. So my strategies do work. On the low end I was up 20% on the high end I was up 56% for just ten weeks of effort. My biggest wish is that I would have taken advantage of the daily and weekly questionnaires to continue to boost the equity I was trading with. I also wish that I had simply been more aggressive in my currency transactions and had not been such a stickler for following my exit rules. Basically, I simply should have taken more chances. I look forward to seeing who the final winner is and I hope to get an interview with him or her to find out what they did to "win the CNBC Challenge".

Madoff, Oil Surplus, 6 straight drops, is it Armageddon yet?

2009-01-14T19:32:00.000-08:00

I think the Mayans may have gotten it wrong by three years, 2012 has come early! I apologize for not keeping up with the blog as diligently as I promised i have been ultra focused on trading. I have continuously looked for an angle to penetrate the upper levels of the game by employing my strategy of taking my profits and focusing on solid trades. It has made all of my accounts in the green, but I still have yet to have a tremendous break out week.

I am currently in the upper 2%, near the top

10,000 but I still haven't figured out the formula. I am anxiously anticipating the end of the contest to see what the winner did to break the barrier.

Obama's stimulus package may be over $1 trillion dollars

2009-01-05T15:03:00.000-08:00

When Countrywide collapsed and was bought out by Bank of America it had over $1.5 trillion dollars in home loans, with the majority non-performing. This was one private company. The true problems facing the United States are deep and insidious, which far exceed the band aid that $1 trillion, $2 trillion, or $10 trillion dollars can fix. The mistake has been made from the onset that trickle down economics work.

Individual citizens must be relieved of their burdens first, before any corporate bail out or investment should be made. Billions of dollars was poured into AIG to save 100,000 jobs when 500,000 jobs are being lost monthly. A federal tax moratorium needs to be put in place to allow the citizens of the United States to have a chance to regroup. A foreclosure moratorium needs to follow to force the banks to help the purchases protect themselves against unscrupulous lending practices. Unless these fundamental measures are taken, no matter how much money is pumped into the market economy it will be stymied by the fact that everyday people will not gain access to any of the services.

Back from my 2 week vacation

2009-01-02T19:46:00.000-08:00

Just got mack from y two week vacation to find my ranking in the 3-5% range for the last week. The market's stunning performance this Friday has lead to a surge above 9,000 in the dow for the first time in two months. Next week's employment figures along with the returned volume will set the stage on whether or not this is the beginning of a bull market or just a temporary respite from the weak economy. More trades, currency and stock, forthcoming in the final few weeks of the contest.

Day 20 & 21 - Free Money! Yeah?

2008-12-17T10:53:00.000-08:00

The Federal Reserve has reduced the interest rate down to zero, but the bill collectors still keep coming. Home foreclosures are expected to hit 2 million people, jobs continue to be shed at a rapid rate, and the world is looking to the United States as if we have are the only ones with a problem. If we thought the asian flu was contagious then the U.S. flu will be twice as bad. The Federal Reserve has made a grave mistake, in the process my holdings in the game have moved like lightning, my euro holdings have made over $60,000 in 11 days, unfortunately all indicators are screaming overbought. My gold stocks have jetted up in value as well, too bad I have't been able to get everything moving at the same time in the same account, so now I have two accounts up 30%, but my conservative nature is killing me in the process.

Days 17,18,&19 - Automakers allowed to fail

2008-12-12T11:29:00.000-08:00

I am still caugh at an empasse. My returns are double digit, but have not propelled me into the top spot for the week. With the contest 50% over I will have to find the key that will open up the final level to get over the hump. A lot of traders are imploding and so my top ranking is bouncing between the top 2-5% on any given day.

If I am to have any hope of making it to the finals I have to win a week. This will require almost a 100% return for the week, this weekend will be the litmus test for my strategy to see if I can find some diamonds in the rough that will give me the boost.

Day 16- Hard to get back in the groove

2008-12-09T09:18:00.000-08:00

I created a 3-hour introductory course for my fully blown "Winning the Trading Game" course and found myself distracted from the CNBC Challenge. The audience at the Denver Trading Group was a blast to meet and it was definitely refreshing to speak to some established traders. That allowed me to move forward quickly without focusing too much on vocabulary. They also helped me clarify some points in my seminar that could be misunderstood or misinterpreted based on the slides I had created.

With all of that being said I neglected my trading duties. So far another one of my accounts is "Winning Portfolio C" and so I exited my positions and I am looking to clean slate. I have fallen in the overall rankings in my strongest acount to the top 30,000. So I will have to move into high gear over the rest of the week and net next few weeks if I hope to make it to the finals.

Day 14&15 - Making trading mistakes

2008-12-05T16:13:00.001-08:00

Yesterday, I was preparing for my seminar for the Denver Trading Group in Denver, Colorado and made an early move to buy the Euro's strength. I had a set back and lost $7,000 in the position and was automatically stopped because of my over margining.

I stepped up my playing of the CNBC Bonus Bucks and I am showing greens across the board, unfortunately I still haven't had my second major breakthrough and there are only eight more weeks in the competition.

Day 13 - Hurry up and wait

2008-12-04T08:32:00.000-08:00

I am once again battling with my indicators. I am looking for a confluence of events to show up on the charts and basically I am back at square on with my picks. My "Winning Portfolio A", my longshot trades, are still on along with my gold positions in my "Winning Portfolio D". Yet my indicators are screaming for me to wait for a big break in the currencies, in the mean time my ranking is slipping. On the one hand I realize it's time for me get off of the sidelines in my most successful portfolio, but I don't want to be rushed solely because my ground is slipping. I guess this is what comes from having the turtle as your animal totem.

Day 12 - Bonus Bucks

2008-12-02T15:44:00.000-08:00

Being out of the market the last two days I have finally been able to add the free money of the game to my account the infamous "Bonus Bucks". Each day a trader can earn an additional $12,000 to their trading capital, which brings in a cool $60,000 per week. I missed out on the first week and while I wait for my indicators to give me the buy signal I will collect the money just like everyone else. In order to accomplish my goal of "playing to win" I can no longer miss any bonus bucks if I want to have a snow ball's chance in winning. I only have 10,000 people to beat to be number one, lot different from 400,000 plus.

Now it's time to switch gears a little play big, play smart. The Euro's failure to break through the upper resistance has lead for a drop back down to support. Looking for a break or a bounce, at the first sign I am going to make a run for it. Too bad I can put a "stop" entry order, the move will be big.

Day 11 - Top 2% Trader Doing Nothing

2008-12-01T15:54:00.000-08:00

When I teach my students how to trade I speak of the three "Rule of Threes".

The first rule of three is that the market can move one of three directions - up, down, or sideways.

The second rule of three is that a trader must master money management, technical analysis, and risk management in order to have any hope of being successful when it comes to trading.

The third rule of three is that there are only three ways to approach the market - long, short, or flat.

On Wednesday I exercised my trading discretion and experience with false rallies to exit trading in my most successful portfolio. Many of you saw my trades and at the end of seven days I was up only 39%, that put me in the top 5% of traders. I took a much needed hiatus from trading to enjoy the holidays and a few of you thought I was making a big mistake because of the big rallies last week and you let me know.

Had my experience not taught me otherwise I would have easily changed my position and began

to chase the markets. But my gut told me to sit on the sidelines and stay flat the market, the third rule of three. Today I just shook off 13,000 people that were my competiton. Some of them may come back, but many of them will overtrade during this volatility and continue to be slammed hard. At the end of today's rankings I am trader 9, 190 out of 400,000 plus traders which puts me in the top 2% It is unfortuante that the markets are fluctuating so aggressively, but I am still attempting to beat the game.

Day 9/10 - Happy Thanksgiving!

2008-11-29T13:59:00.000-08:00

My returns are still strong, up 33% after 8 days of trading, but it wasn't enough to propel me past the 3% mark.

I took the holiday break and on Friday the stockmarket surged creating new highs. My feelings are still that the rally is most likely tied to weakness as opposed to new purchases . Monday will be the litmus test to see if this rally will be sustainable.

My market trading tactics will most likely remain the same. There will be more aggressive buying and selling in the currency market, but I will still look to follow the trends. At this point the dollar is strong. Sunday night will give us the best indicator.

Day 8 - Slammed by dollar rally, top 3.5% of traders

2008-11-26T09:23:00.000-08:00

Yesterday afternoon I committed a cardinal sin, I walked away from my Euro currency purchase without any from of risk protection beyond my soft stop of 2%. Today I was slammed by my decision and had to dump my long Euro positions in a reactionary fashion.

This is unfortunate because yesterday I was worried that this type of event could happen and did little to protect myself in real time. With the limitations of the game staring me in the face, it becomes even more evident that some fundamental tools are missing that I have taken for granted over the years. It also makes me realize how labor intensive the game is compared to real trading.

This disappointment comes in the face of my best standing in the game so far ever, top 3.5%, top 15,000 traders out of 300,000. This makes me feel very well vindicated. My next step is to refine my approach next week after taking a two day hiatus. Tomorrow there will no trading, because of Thanksgiving, so enjoy yourselves, and Day 10 will have a lot of mixed messages, plus currency trading will shut down around the world Friday evening.

I am on the right track, for that I find some solace in my trading approach.

Day 7

2008-11-25T13:47:00.000-08:00

Someone once told me you can have everything you want, but not all at the same time! This is my current situation in the game. My currency returns in my "Winning portfolio B" are now at 57% but I am dismally behind in my stock picks. This weekend I will try to rebalance my stock portfolio to kick my returns into high gear, while maintaining my aggressive trend following in the currency markets.

Today's stock market posted modest gains after a lot of volatility, the hope is that the shorts will continue to cover their positions into the holiday weekend and that we have seen the bottom of the stock market. If that is the case then bargain hunting is in order.

I have an old article about new president's and the stock market that I wrote four years ago when Bush and Kerry faced off, I will look around and see if I can find it to post in the coming weeks.

Day 6 - Top 6.8%

2008-11-25T08:47:00.000-08:00

My "Winning Portfolio E" is moving like gang busters! It is now in the top 6.8% The tremendous boost by the bailout in the Citigroup added to my profits plus some very solid currency buys. I am still frustrated how I was kicked out of the Euro trade last week, my euro holdings would have been significantly stronger.

This goes back to my core philosophy about trading, there has tobe a hedge on. My losses would be a fraction of what they are if I had the choice to use options to protect my positions, possibly next year we will see options finally added.

Another mistake I keep making is actively keeping track of the various portfolios. Each one is tailoored on varying phiosophies and I have to become better at allocating my currency trades evenly among each one. This morning I discovered that I had not put on the same Euro trade my "Winning Portfolio C" and that costs me a $10-13K boost in that account. I executed the trade regardless, because the fundamentals are still there, but I am concerned about the Thanksgiving holiday.

While I am on average a trend following-swing trader I am intelligent enough to know that there are multiple factors coming into a holiday like this to consider. My long time wisdom has taught me in the futures market a long weekend typically forces the trend followers to take profits so they are not caught unaware on the following Monday, but there are two trends that I have to be conscious of:

First the overall trend of the stock market is bearish - does this mean that the shorts will be exiting the market to drive the price up or does this mean the short term bullish counter-trend buyers will leave the market in droves forcing the market down - I tend to believe the latter.

Second the over all dollar is weak, but the banks are getting large cash infusions from the federal government to stay afloat, could this portend a stronger dollar, since the weak dollar that Bush has foisted upon the American people has had little impact on improving our lives, if that is the case will the banks be buying up dollars this weekend forcing the Euro and the Canadian Dollar to lose their most recent momentum? At the same time America is banking on printing money in order to bailout the economy.

Who knows what will happen this weekend! I may have to exit my positions first thing tomorrow morning to keep the little profits I have made.

Day 5- Some Redemption

2008-11-22T16:15:00.000-08:00

I survived the first week of the game! While I didn't win the week, at least one of my accounts "Winning Portfolio E" increased my rank to 47,600. It has definitely been an uphill battle, but my buys in the Euro and Canadian Dollar gave me returns ranging from a low of $9 to a high of $40,000.

These trades played a significant role in my interim successes. Next week my focus is to concentrate my weak portfolios in one sector, metals, hold on to my 52 week lows, and aggressively increase my forex activity, while at the same time I will not miss out on the free $60,000 CNBC bucks by answering the not so trivial "trivia" questions.

Day 4 - Technical Difficulties and Forex Success

2008-11-20T14:25:00.000-08:00

Early this morning CNBC emailed everyone and told them that they were having technical difficulties, but it didn't really matter for me. My biggest technical difficulty has been the tanking stock market.

My 52 week low strategy has officially lost me $174,000 to date. This has driven me back down into the 98 percentile.

My other accounts are doing okay and maybe as a glimmer of hope my purchase of the Canadian Dollar has pushed me to $38K in profits in the game. It's got me thinking maybe I should just stick with what I'm good at ;)

In my portfolio B account my Canadian Dollar Position has me up to $50K a 50% return on my $100,000 investment in just four days.

Tomorrow is the end of this week's contest and I definitely will be missing out on getting the MLB All Star Game Tickets.

Out of my five accounts my best rank is 156,000. Tomorrow I will be posting screen shots of my final weekly positions and returns.

One week down, nine more to go. To make the blog more robust I will also be adding the names of the stocks I picked and wil lconsider what my next move will be based on the analysis.

Day 3 - Ranking increased

2008-11-19T15:28:00.000-08:00

My ranking increased, I went from the low 300,000's to the mid 200,000's today putting me in the 56% group. A leap from the 96% group I was in on Tuesday. But I have to kick myself for making two mistakes.

This is a game and since it is a game there are "cheats" that can automatically improve your ranking. You can invite people to the event and you can answer questions about CNBC. If you answer questions on CNBC you will automatically get $12,000 CNBC bucks daily. That's $60,000. If you did no trading your account would e up 6% just by answering the questions.

Plus with the unlimited number of people that you can invite you can make a tremendous amount of CNBC bucks.

I haven't been doing either and that has already put me down $36,000 since the inception of the game. Tommorow that changes.

The second mistake is buying cheaply. In one of my portfolios I bought nothing but stocks at 52 week lows at around $2-3. While when they move on the upside there is a lot of potential to make a lot of money, the continued weakness of the stock market is having a disproportionate affect on their standing.

Basically the weak are getting weaker, hmm. Trend following 101, I should slap my own hand. At the same time, the game side of me sincerely believes that if I can hold them until they rebound the rewards will be tremendous.

The question is will they rebound in a nine weeks or is the weakness here to stay?

Crystal ball anyone.

Day Two

2008-11-18T13:35:00.000-08:00

Dismal!

My strategy of picking companies at at 52 week low have produced the desired affect of exposing me to volatility, but unfortunately in the wrong direction. My rank is down in the 3oo,ooo's.

My currency picks in the Canadian Dollar have proved fruitful, while at the same time my picks in the Euro are backfiring against me.

The reality of the situation is that two things are currently bugging me:

1) My swing and position trading background is proving detrimental to my currency spot trading for the game. I have had to readjust my time frames from my usually daily and four hour outlook to looking at the five minute and the hourly chart.

2) Entering and exiting trades on an end of day basis is becoming cumbersome. There is the down time of the pending allocation, so it makes it difficult to enter and exit quickly.

Of the strategies discussed yesterday the 52 week low is the most promising. If the markets had gone in my direction I would have had some phenomenal returns based on the number of stocks in my holdings. I will stick with that strategy and attempt to make a composite portfolio of my best trading decisions in the coming weeks.

It's been a rough two days, but let's keep treking along. I look forward to seeing what the most popular stocks in the game will be come Friday. Have to keep my eye on the grand prize.

Day One

2008-11-17T15:09:00.000-08:00

Today was pretty frustrating. My internet connection with the CNBC site began to drag during the day. It made it difficult to confirm my orders were going in and I had to constantly refresh the page.

On the bright side I was able to narrow down the stocks I was interested in trading based on a specific set of criteria I had developed over the past few weeks.

1) Stocks with 52 week Highs and Lows
2) Stocks with a share price under $10
3) Stocks with strong institutional buyers
4) Stocks that have been up after their Friday earnings report
5) Stocks that have crossed the 50 day MA

With all of these personal criteria I still had to make sure the stocks fit the contest criteria of $500 billion dollar market capitalization, exceeded the $2 per share rule, and were listed as approved stock on CNBC's site.

My goal is to 100% attempt to find fast moving, inexpensive shares that have the ability to double or triple over the life of the contest, but have little downside risk.

I have taken positions in both the Euro and the Canadian dollar, but I have yet to tackle the use of the ETFs. Ideally I wish I could be good at everything, unfortunately it's beginning to look like I may have to leave the ETFs off or convert one of the portfolios to an EFT only strategy. The only lament I have with the ETFs is that we cannot short them, based on my limited findings today.

So we are off to the races. This weeks contest ends on November 21st. By then we will see the favored shares for trading and the first winner of the contest. Tonight and tomorrow I will be re-evaluating my currency trades and I may take a more active stance when it comes to buying and selling, depending on the weakness of the dollar in the weeks to come.

Putting out the challenge to other trading gurus

2008-11-14T16:56:00.000-08:00

While I don't consider myself a trading gurus others look at the fact that I have put out several books, seminars, and videos as proof. In fact I consider myself a true student of the markets. I give the markets my all and by teacing I am reminded of the fundamental mistakes to avoid.

In that vein I have decided to enter the CNBC challenge. While my expertise does not include stocks, I believe trading is trading, whether it's ETFs, Forex, or Commodities. This contest will give me the chance to prove it and along the way I may have the opportunity to win a few prizes and ultimately pick up the top prize of $500,000.

In the mean time I have put ou a press release to let the world know what I am doing and hopefully cajole some of the real trading gurus out there to take part in the contest. It would be exciting to see many of them pit their expertise against the market with zero risk, except the potential blow to their egos ;)

How this blog will work:

1) We have three days until the contest officially starts. At the close of the NYSE around 4:30PM EST I will post my experiences for the day.

2) At the end of each week I will let everyone know my rankings in Forex and Stocks and ETFs

3) On Sunday evenings I will talk about what I will do differently, if anything, in the upcoming week.

Some realities of the contest for me:

1) Technology is my weakness. I am definitely afraid I will make more mistakes just getting up to speed on the Think or Swim platform and learning the FXCM execution interface.

2) I have a steep learning curve when it comes to stocks, while intellectually I know what I will need to do to pick stocks, the execution will become difficult while I try to get up to speed on using my Trade Navigator platform to look for my criteria

3) I still have to speak and trade my own account.

My goal is to win the contest and any suggestions when it comes to stocks will be much appreciated.

Post on the blog how your experiences are going as well, to date I think this will be the largest number of contestants that this game has ever had.

See you on the trading screen!

Getting started with the CNBC Challenge

2008-10-29T12:09:00.000-07:00

For an investment of a little time you can play the CNBC $1 million Challenge for free, but win real prizes. At the beginning of the year I kicked the tires, got a feel for the software and the set up and I am ready to play for real now.

For those of you now familiar with the challenge CNBC gives you a fake $1 million dollars to trade stocks and now forex with. Who ever makes the most money in the course of a week will win a prize each week for ten weeks. The top finalist after the ten weeks will go to a face off round for two weeks and the winner at the end of that two weeks will get the grand prize of $500,000, in an annuity. The contest starts November 17th, 2008.

While I have no delusions that I can guarantee that I will win the challenge I will use every tool at my disposal when it starts to attempt to win. While many of you know my expertise is centered around Forex and Futures I will be blogging my experience for the entire 40 days with end goal of putting my experiences, along with those of other players, and winners.

Feel free to comment and let me know how the market is treating you.
Let's have fun and take advantage of a way to add a little to our income without having to put up any money of our own.

Good luck and good fortune.