How I Turned $250K into $364K in One Month

Andrew Anger, a junior at Saint Mary's University of Minnesota, was the October winner in Stockpickr's Wall Street Pros vs. Main Street Joes stock game. A $1,000 prize is awarded to the game's top percentage winner every month, in addition to weekly prizes.

Trading is similar to poker: You have to know when to hold 'em and and when to fold 'em. You have to be able to manage what you have, fiscally and successfully.

According to one of my favorite trading books, Mark Douglas' Trading in the Zone, trading is a psychological battle with yourself, and the challenge is not to allow your emotions to dictate your trades.

Trading is also a battle with everyone else in the market. What every individual trader, hedge fund manager and investor is thinking controls the direction of the market.

Since trading involves crowd psychology and moving with the flow of the market, support and resistance lines are useful. These tools, along with knowledge of stock patterns, are key to understanding crowd psychology. They are an insight into how the crowd has acted and may act in the future.

There are two ways I use support and resistance lines when looking at intraday charts. The first is to find and trade stocks trading in a range, simply buying at the bottom of the range and selling at the top (or shorting at the top and covering at the bottom).

The second way I use support and resistance lines is to wait for stocks to break out of them. Using this simple strategy, I was able to win $1,000 in the Stockpickr Stock Game, Wall Street Pros vs. Main Street Joes, during the month of October, sporting the top monthly gain of 45.5%.

Another essential aspect of my decision-making hinges on the general market direction. In order to determine this, I use a variety of ETFs within my daily trading watch lists. These ETFs give me an indication of how the markets are doing overall, and they work well with support and resistance lines to help determine an entry point to buy or short.

In real-life trading, these tips can get your portfolio headed in an excellent direction. But if you want to win a stock contest, you must be able to take high risks. My stock-contest trading style involves trading the most volatile issues, which are often penny stocks, with a value of $1 to $10.

As an example, during the October edition of the Stockpickr Stock Game, I had an explosive gain of 130% with my position in Clean Diesel Technologies ( CDTID), yielding me a gain of more than $83,000. A few other stocks that ran hard during the last two weeks of October were China Shen Zhou Mining & Resources ( SHZ), which I bought and held overnight for a monstrous 100% gain, and RiT Technologies ( RITT), for a 50% gain. These stocks netted me over $92,000 collectively within the game.

By being quick to react and taking profits after these big moves, I was able to turn my $250,000 virtual Stockpickr game portfolio into almost $364,000 during the course of October.

Since my gains, all three stocks have retreated -- Clean Diesel Technologies is down about 70% from its recent high -- but they remain on my watch list. A good trading philosophy to keep in mind regarding penny stocks is that what goes up must come down.

While trading in a fantasy stock contest is different from real life, it is a great way to practice and enhance your skills. The Stockpickr Stock Game offers participants an excellent learning experience while allowing them to do so in a highly competitive real-time environment. With more than 1,000 people playing the game, you can see if you have what it takes to be the best.

Perhaps best of all, people can win money without needing to actually invest in the real stock market.

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Andrew Anger is currently a junior in college at Saint Mary's University of Minnesota, where he will be double majoring in marketing and entrepreneurship management. You can find him continuing to trade in Stockpickr's Wall Street Pros vs. Main Street Joes as "gotanger3."

This article was written by a member of the Stockpickr community. Stock recommendations and comments presented on Stockpickr.com are solely those of the members quoted. They do not represent the opinions of Stockpickr.com on whether to buy, sell or hold shares of a particular stock. Members should be cautious about any and all stock recommendations and should consider the source of any advice on stock selection. Various factors, including personal or corporate ownership, may influence or factor into a member's stock analysis or opinion. All members are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance or portfolio performance is no guarantee of future price appreciation or performance. Furthermore, Stockpickr.com does not guarantee the accuracy or completeness of information on the site, nor does Stockpickr.com assume any liability for any loss that may result from reliance by any person upon any such information or recommendations. Such information recommendations are for general information only.

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