Boost your earning potential and improve your fantasy trading strategy with these eight techniques.
Those who fail to plan, plan to fail. It might seem cliche, but anyone who’s serious about turning a profit from fantasy trading contests needs to go in with a set strategy if they want to succeed.
Since fantasy trading apps offer so many options for users to choose from, it’s important to know exactly what you’re getting yourself into.
So, how can you maximize the profitability of your fantasy trading strategy? We’ve put together the eight best tips used by real traders.
Do I Really Need a Plan?
Yes, you really need a plan. Putting a bunch of money into an account and randomly picking stocks is a recipe for disaster.
But more importantly, you need to stick to your plan. Trust yourself, at least while a fantasy trading contest is open. If you realize that your strategy isn’t working after a few rounds, don’t be afraid to change it up.
Any number of changes in the market might make you reevaluate your plan, but always do so when you’re not actively trading.
There’s no silver bullet, each trader will have their own needs and tactics. Don’t be afraid to experiment.
How Do I Make a Fantasy Trading Plan?
Sadly, there’s no real recipe for guaranteed success in fantasy trading contests. No two people will have the same needs, knowledge, and skills.
That said, there are several components that all good strategies share. Here are our top eight:
1. Test yourself
There’s no better way to see if you’ve got what it takes than to just give it a shot.
Most fantasy finance platforms, like StockBattle or Investor, let users start with Freerolls. These are free-to-enter contests that operate just like normal paid matches and offer chances at real money.
Try a few and see how you do, you might just be a natural.
2. Prepare Yourself
A lot of fantasy trading contests are quite short—StockBattle matches only last for 15 minutes.
You’ll need to keep your wits about you if you want to outsmart your opponent. Get plenty of sleep, grab a cup of coffee, and settle in.
Make sure you’re comfortable and that you won’t have to deal with any distractions.
Even a momentary lapse could cost you if it comes at the wrong time.
3. Know Your Limits
How much of your wallet should you wager on any one fantasy trading contest?
That’s up to you, but it’s important to set a limit and stick to it. While each individual contest is guaranteed to produce one winner, any combination of bad luck or poor planning can cause even the savviest trader to hit an occasional slump.
If you’re just not having a good go, take a break, come back, and fight another day.
4. Knowledge Is Power
Before you log on to a fantasy finance platform, be sure to check out what’s going on in the world.
Which markets are up? Which are down? Even something as simple as checking the S&P 500 can give you some great insight as to what’s going on in the markets.
Be careful, though. Rumors and speculation can be powerful drivers, but if they don’t pan out, the loss can be huge.
5. Have an Exit Strategy
Every time you pick a stock, you need to have two exit points. One of the picks does well and one if it doesn’t.
At what point do you need to accept your losses and move on? No one likes selling at a loss, but it’s often better to cut and run when your picks turn against you in a fantasy trading contest.
Likewise, it’s important to know when to sell. No stock climbs forever; eventually, the trend will reverse.
Know at what point you want to cash out and claim your earnings.
6. Set Entry Rules
It might seem strange to talk about entries after talking about exits but it’s for a good reason: a good exit is more important than a good entry.
Even if you’re late to the party, you can still turn a profit by selling at the right time.
Knowing when to pick a stock is one of the most hotly-debated topics when it comes to fantasy finance but it’s important to have a set of triggers ready to be pulled.
These could be as simple as “buy x shares at y price” or “buy y shares at z o’clock”, but there’s theoretically no limit to them. The important thing is to keep them simple and limited in number.
If you have to consult a full-page flow chart for each trade, you’ll never manage to buy at the best time.
7. Keep Excellent Records
If you don’t track your performance, you’ll never know how you’re doing.
Keeping detailed records of what worked and what didn’t will help you avoid making the same mistakes twice while letting you recapture your successes in future fantasy trading contests.
Most fantasy finance platforms keep track of your performance for you, making it easy to see what worked and what didn’t.
8. Analyze Your Performance
While winning and losing maybe what most people remember, it’s invaluable to know why a day went the way it did.
Did you do better this week than last? That’s great! But what did you do differently?
There’s always room for improvement, and the fast pace of fantasy trading contests on apps like StockBattle lets you evaluate yourself after each match.
Putting It All Together
Now, it’s time to put all of this theory into practice. Get started by downloading a fantasy trading platform like StockBattle or WealthBase today and try out a Freeroll.
How does your instinct stack up against the market? So, put on a pot of coffee, get settled in, and start reading up on the latest finance headlines.
Pick an exit, get onboard, and stick to your plan.
As with any skill, practice makes perfect.
Don’t expect to come out the gate hot, success requires patience and determination.
There’s no one-size-fits-all strategy, but by taking these steps into consideration, you can earn more bang for your buck with fantasy finance today.
