Paper trading helps us improve our outcome in the long run
TLDR: I will share my 4 hypothesis I'm testing using paper portfolio. Why do I use paper trading? Because having knowledge will allow us to achieve better outcome, so use paper trading to test out hypothesis and accelerate the testing and learning process, so that we can learn faster without the fear of losing real money.
Story time
In the stock market world, I believe that positive knowledge is positively correlated to positive outcome. The better the knowledge you have about a company or a trading strategy, the better outcome you will achieve. The more asymmetric the knowledge you have, the greater the outcome you will get (a.k.a insider trading). *cough* Nancy Pelosi *cough*
In the stock market world, I believe that positive knowledge is positively correlated to positive outcome. The better the knowledge you have about a company or a trading strategy, the better outcome you will achieve. The more asymmetric the knowledge you have, the greater the outcome you will get (a.k.a insider trading). *cough* Nancy Pelosi *cough*
So how does paper trading helps?
It helps because this feature allows us to test out hypothesis without the need to use real money. It allows us to test out hypothesis and removing the emotional aspect of trading, because no money is involved. As we can create multiple portfolio using the paper trading on moo moo, we can test out multiple hypothesis at the same time. So it allows us to test faster, fail faster, and learn faster.
So if you just learned about some cool Technical Analysis such as PSY from moo moo, like in this post:
It helps because this feature allows us to test out hypothesis without the need to use real money. It allows us to test out hypothesis and removing the emotional aspect of trading, because no money is involved. As we can create multiple portfolio using the paper trading on moo moo, we can test out multiple hypothesis at the same time. So it allows us to test faster, fail faster, and learn faster.
So if you just learned about some cool Technical Analysis such as PSY from moo moo, like in this post:
And say you don't know if you use these indicators to buy and sell stock or not? Why not test it out for a few months using paper trading and see for yourself?
As you buy and sell, as you earn and loss fake money, you can analyse and learn when you should or should not use it. Thus when you use real money next time, it should help improve your odds a little![]()
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Some of my tested hypothesis
I do use paper portfolio myself to test out some hypothesis that I have.
All in on Tesla hoping for super short term extraordinary gain
Well the first portfolio that I create was mainly for a competition held by moo moo in June. The competition is to create the winning portfolio and at the end of June, the most profitable portfolio will win.
My hypothesis was that with safer stock that doesn't have extremely high volatility, it won't create extraordinary gains. So to win, it is to go big or go home![]()
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Thus I choose to go 100% into $Tesla(TSLA.US$ as it has very high volatility and a highest chance for external events to happen that could pump the stock up. I know many are anticipating Elon might announce a stock split so I just pray that he will tweet a stock split in June so that I can win![]()
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With that in a bear market, this portfolio manage to get a 14.28% gain. I did check and screenshot all other competitors portfolio and my portfolio won, but the result is not announced yet I think. The result is not out yet right @Meta Moo ?
As you buy and sell, as you earn and loss fake money, you can analyse and learn when you should or should not use it. Thus when you use real money next time, it should help improve your odds a little
Some of my tested hypothesis
I do use paper portfolio myself to test out some hypothesis that I have.
All in on Tesla hoping for super short term extraordinary gain
Well the first portfolio that I create was mainly for a competition held by moo moo in June. The competition is to create the winning portfolio and at the end of June, the most profitable portfolio will win.
My hypothesis was that with safer stock that doesn't have extremely high volatility, it won't create extraordinary gains. So to win, it is to go big or go home
Thus I choose to go 100% into $Tesla(TSLA.US$ as it has very high volatility and a highest chance for external events to happen that could pump the stock up. I know many are anticipating Elon might announce a stock split so I just pray that he will tweet a stock split in June so that I can win
With that in a bear market, this portfolio manage to get a 14.28% gain. I did check and screenshot all other competitors portfolio and my portfolio won, but the result is not announced yet I think. The result is not out yet right @Meta Moo ?
Let me buy over and shut it down
The next hypothesis I wanted to test was to buy stocks with price that made absolutely no sense. The price is so low that if I were to buy 100% of the shares, the forcefully shut the whole company down, sell its asset at a discount. I will still earn tons of money.
And the first target I found was $DiDi Global Inc(DIDIY.US$. When DiDi was trading at $1.40, the PB ratio was 0.4. Just with the amount of cash it had, even after paying all its liabilities, it is more than $1.40. If I have the money? I will buy every single share and shut the whole company down and profit from it man. So this is the hostile takeover portfolio.
DiDi reached manage to hit a high of $3.80 after a while. But why is my returns only 10% instead of 200+%? Because I chickened out. Delisting fear taken over, and I sold at a small profit and missed out on the big one. So this is a painful but valuable lesson for me![]()
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The next hypothesis I wanted to test was to buy stocks with price that made absolutely no sense. The price is so low that if I were to buy 100% of the shares, the forcefully shut the whole company down, sell its asset at a discount. I will still earn tons of money.
And the first target I found was $DiDi Global Inc(DIDIY.US$. When DiDi was trading at $1.40, the PB ratio was 0.4. Just with the amount of cash it had, even after paying all its liabilities, it is more than $1.40. If I have the money? I will buy every single share and shut the whole company down and profit from it man. So this is the hostile takeover portfolio.
DiDi reached manage to hit a high of $3.80 after a while. But why is my returns only 10% instead of 200+%? Because I chickened out. Delisting fear taken over, and I sold at a small profit and missed out on the big one. So this is a painful but valuable lesson for me
Trying to trade at the stock trading band
The next portfolio I created is mainly to test if it is profitable to do swing trading. I realised that $Grab Holdings(GRAB.US$ have been moving between $2.50 and $3.00. So this portfolio is for me to buy when GRAB is around $2.50 and sell when it is around $3.00. So far so good![]()
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I intent to keep testing it out and use it to better my skill at swing trading before doing it for real. I'm sure there are many things that I don't know yet, so hope to uncover more and learn more along the way![]()
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The next portfolio I created is mainly to test if it is profitable to do swing trading. I realised that $Grab Holdings(GRAB.US$ have been moving between $2.50 and $3.00. So this portfolio is for me to buy when GRAB is around $2.50 and sell when it is around $3.00. So far so good
I intent to keep testing it out and use it to better my skill at swing trading before doing it for real. I'm sure there are many things that I don't know yet, so hope to uncover more and learn more along the way
If you are here, why aren't you supporting Moo Moo?
The last paper portfolio I have is just to all in and support Moo Moo, $Futu Holdings Ltd(FUTU.US$. I mean I love it here, so why not right? hahahahaha![]()
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The last paper portfolio I have is just to all in and support Moo Moo, $Futu Holdings Ltd(FUTU.US$. I mean I love it here, so why not right? hahahahaha
Conclusion
So yea, I believe that paper trading will help us achieve better outcome in the long run so long we use it correctly. When we use it to test our hypothesis scientifically, and keep on learning from it. It had helped me gain some knowledge and confidence in that knowledge already. So I'm sure it can help you too![]()
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So yea, I believe that paper trading will help us achieve better outcome in the long run so long we use it correctly. When we use it to test our hypothesis scientifically, and keep on learning from it. It had helped me gain some knowledge and confidence in that knowledge already. So I'm sure it can help you too
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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101678458 : no
102271766 : no
doctorpot1OP 101678458: no? May I understand what do you disagree at?
doctorpot1OP 102271766: no? May I understand what do you disagree at?
SANDRO 善子 : Definately YES
SANDRO 善子 : I do a time capsule on paper trading for 1 year, when I open the capsule, I see the true face of the stocks
doctorpot1OP SANDRO 善子:
doctorpot1OP SANDRO 善子: Yes only time will tell the calue of the stock
and paper portfolio kindda help us track it hahaha. if use our head to try and remember, sure forget one
Milk The Cow : That's some very nice portfolio names u got there
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doctorpot1OP Milk The Cow: Hahaha
like that easier to remember the strategy hehehe