Profiting from stocks without trading stocks
If you know me in real life or you have read my previous posts, you can tell I like all things money and economics, but especially the stock market. I’ve been interested in it ever since I started high school. However, I lived in Ethiopia, and investing in stocks is not as easy as it would be for someone who lives in the U.S. or Europe. For starters, it is virtually impossible to get foreign currency outside of the country unless you are importing stuff into the country. On top of that, people under 18 have to sign up for a trading account under an adult. In my case both were Ethiopian citizens. Unfortunately, most stock-brokerage apps don’t allow Ethiopian citizens on their platforms, so it was very disheartening at the time.
Towards the end of my freshman year in high-school however, something interesting happened. I saw a kid from class looking at a chart on a library computer. Out of curiosity I asked him what it was and he told me it was a stock-chart. I was honestly shocked. I had always thought I was the only one in my school interested in the stock market. I was even more shocked when he pulled up a trading account with a five MILLION dollar balance. He later explained that it was a simulator trading platform, meaning that it wasn’t actually real money on the line. It was fake money that you could invest into real equities and shows you how much money you would have made or lost on your trades. When I got home, I immediately signed up on the website, howthemarketworks.com and was instantly hooked.
However, after about a month or so, I was a little bored. That was until I found out about the competition feature on the website. After a little looking around, me and my friend found other kids our age interested in stocks (a few other classmates but mostly friends from other schools and relatives) and started a competition. We set weekly competitions that allowed trading equities Monday to Friday, and cryptocurrencies and forex seven days a week. That replaced the thrill of it. The competition aspect of it motivated us to dedicate a huge portion of our free time towards it. We even met up at the end of a competition for the winners to discuss stocks and strategies that helped them win. Initially each participant had to bet around 100 Ethiopian Birr to participate, and the one with the highest portfolio value at the end of the week took the pot. It wasn’t proportional to our gains nor was it a lot of money (100 Ethiopian Birr is barely 3 US dollars) but its a way to monetize a knack for stocks.
We still do this, but we changed the platform from howthemarketworks.com to investopedia.com trading simulator. The latter has closer to real time stock data, which is hard to come by on a simulator. To my knowledge, the only other simulator that offers it is TD Ameritrade’s simulator thinkorswim© which, you guessed it, is not available to Ethiopians. Regardless though, it is still a very accessible and productive hobby
Worldwide this is growing very fast and is incredibly popular as you can see from many reports worldwide online here. There are even trading competition services that offer wager competitions with high stakes prizes in millions every year. I can honestly say this hobby is one of the biggest factors for me to want study Economics/Finance in college.