How to Win

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How to Win Updated


Anyone can win this contest and I'll tell you why: It's not based on reality, it's a game that's designed to make you watch CNBC and open an eTrade account. They give you $10,000 for trivia questions so that you watch the show religiously. They give you $1000 referral bonuses so that you bring along all your friends. They put you in the notoriously addictive stock market and give you ridiculous amounts of money to play with. They show you that there is the potential for making riches in the stock market. In the end they win thousands of new customers. It's an excellent marketing strategy and one that must be successful because this is not the first time they've done it. If you want to win the challenge, this is all good news. Here is how to win CNBC's Trading Matters Challenge:

(Please note: These strategies do NOT represent sound investing principles. Do NOT use these strategies for investing real money.)

#1 - Buy risky stocks. Buy the penny stocks that double or triple in a day. Don't waste your time with blue chips. Remember, all you have to do is begin the week with more than $100,000, get the highest percentage gain for the week and you're in the finals. Even if you go bankrupt one week, the trivia question bonuses will give you a chance to earn back your $100,000 and win another week.

#2 - Buy only 5 stocks at a time and use all your cash. Don't diversify more than you have to. If you like more than 5 stocks, pick only the best ones. The more stocks you buy, the less your overall gain will be if one of them takes off.

#3 - Get as many of your mates involved as possible. Get family involved. The Maserati is better off in your family than someone elses. Cooperate with each other. Make sure that your portfolios are not all the same - you're not all going to win.

#4 - Answer the trivia questions. $10,000 a day is a lot of money. You're not going to make $10,000 a day consistently from your trades. If you go bankrupt, it only takes 2 weeks to be back in the game if you answer all the questions. Watch Trading Matters for the questions. Search for them on the net. If you don't know the answer, call your mates, search the net but make sure you get it.

This is an important point: The rules state that to qualify as a weekly winner you need to start the week with more than $100,000. If you drop significantly below that amount, close your positions and wait until you have built your account back up to $100,000. Don't be a cowboy and stick with your losers, you just risk losing time. If you lose two weeks building back your $100,000 that's two chances you lost of being a finalist.

Some of you will feel that you're better off to play conservatively and try to end up in the final 20 largest accounts, who end up as finalists also. Well it sounds like a fair enough plan, but I don't recommend it because the duration of the contest is too short. Most professional traders will tell you that to compare two good traders, you need to examine their trades over more than a year. The results over periods shorter than that are too strongly influenced by luck. If you want to play conservatively, I wish you the best, but I think you will end up being disappointed by 20 others who should have been buying lotto tickets.

I recommend reading the following article, although the rules to our competition are slightly different:


How to Win CNBC’s Million Dollar Portfolio Challenge