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So What Would My Strategy Be?



April 27, 2007 – Comments (1)

Ever since I started playing CAPS, there has been complaints about the accuracy part of the score and how it is possible to game it. Today while I was driving back from the store I started thinking about CAPS with no accuracy score, just the raw points. After a few minutes musing, the strategy was obvious.

I'm assuming that the game is exactly as it is now, just no accuracy score. Everything else scores the same with under and over perform calls on stocks.

The strategy is simple. Make a bunch of picks and stay near the 200 pick limit. Ruthlessly cut off anything that headed into negative territory as soon as possible. Let the winners run and only close a pick when you think it has peaked in positive score. Look for stocks that are going to make big moves up or down and harvest points after a big move.

Interestingly enough, this means that there would be MORE trading, not less. If half my picks are losers, that means I will cut them off in the first day or so. No sense in letting something run up a big negative score. Instead it is better to take a number of one point losses and then then have a few stocks that have a big positive score.

It would be interesting to play a CAPS game scored like that to see if that strategy really is the optimum one.


I find it pretty amusing that the much maligned accuracy ranking actually discourages short term trading rather than encouraging it. 

1 Comments – Post Your Own

#1) On May 19, 2007 at 2:05 AM, n8o (66.53) wrote:

Totally agree, great analysis.

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