Stock Markets Exposed - Stock Market Game related to actual stock market.?

Stock Market Game related to actual stock market.?

In economics class, we play the Stock Market Game created by University of Georgia. In the game, we start with 10k and have to invest it, but what most students do is just check http://dynamic.nasdaq.com/dynamic/afterhourma.stm for the most active after hours, buy the one that goes up the most, and sell it the second it goes up. The real stock market isnt like this is it? If it is, why isn't everyone incredibly wealthy? the site is stocksquest.coe.uga.edu The game takes a 10 dollar trade fee. It opens and closes at normal stock market times. I think the biggest difference that I can find (given, I know very little about stocks) is that the game works on a ten minute delay, I believe.

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The real stock market takes factors into consideration that are more than monetary. When you want to be happy with your investment you will look at things like long term history, current reasons for current price, whether or not you believe in the principles the company represents, how long you plan to hold the stock, whether or not you are diversified and whether you can live with your projected investment. I do my own picking and choosing and come out better than the middle man stock broker who makes sure he takes a profit.
THE REAL market has fees and commissions. THE REAL stock market does not allow day trading with only $10K. Well at least not on a consistent basis. THE REAL stock market will take a trading account to $0 OR a trader might even OWE money! THE REAL Stock market closes at 4 PM EDT. Not too many traders can trade after market. IF the University of GA was going to teach trading in the form of a game, they should have used some of THE REAL market's rules and regs. To answer your last Q: why isn't everyone incredibly wealthy? The Answer: Because the University of GA uses the rules it decided to use AND NOT the rules its supposed to use - those of THE REAL market.. "There aren't any gifts on Wall Street." Thanks for asking your Q! I enjoyed answering it! VTY, Ron Berue Yes, that is my real last name!
Of course it's not like that. In the real world, you have to pay commissions and taxes. If you're willing to bet money on what a website says, then you're taking on a lot of risk. If the website is wrong, you'll lose a lot of money along with the commissions you have to pay on a trade. If the website is correct, you'll make a little money, and the commissions plus taxes will erase most of the profits.
No But it is another Las vegas! What you observ is past, actual is future. That is the problem one should note!
Go to a site like investopedia.com or wallstreetsurvivor.com. These sites are more realistic. Have your friends try to use these sites and see how well they do. BTW, you can day trade with under 10K. You can actually open an account with zecco.com and as long as you have $2500 in the account you can make 10 free trades a month and after that it is only $4.50 a trade. So, yes, you could day trade and not get completely killed with commissions, but then just because the rates are low, doesn't mean that you won't....the commissions just won't hurt as bad.
Taxes, commissions, etc. are all good points, but there is a fundamental problem with your idea. There is a little ambiguity in what you wrote. You said that the students: "buy the one that goes up the most (in after hours)". Well, how do know which one has gone up the most in after hours, unless the after hours market is CLOSED? If it is closed, then they have to buy in the MORNING. There are basically two ways to accomplish this: 1) With a Limit order (in which you set your maximum price). If the price you set is too low, your order won't get filled. If the price is too high, you reduce your chance for profit. 2) With a Market order, you basically are saying: "I don't care what it costs, I just want the stock." You can obviously see the problems with this approach for day trading. If your theory is correct, this price will likely be much higher than the afterhours price. Of course, you are also making the assumption that the stock will always be higher the next day, which is quite a risk. Update: Did you say that the game has a ten minute delay? So when you put an order in, do you get the 10-minute delayed price? If so, that's is COMPLETELY RIDCULOUS, because you can make decisions based on future (10-minute) values. How can you make a wrong decision, unless you have to keep the stock for at least 24 hours? Based on that info, my answer is: "No, the real stock market will not let you purchase stocks based on what their value 10 minutes earlier was."
xearn.com is a more realistic site for mock trading. After hours trades are executed based on future prices.