Van Tharp’s Trading Simulation Game!
While people always look for the “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.
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 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 will 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 versus probability).