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Game · Swing Trading · Intermediate

Grade the Decision: A Stock Trading Practice Game

Every round of this stock trading practice game is a hypothetical swing setup with an account size and a risk rule. You choose the entry, the stop and the position size, and each choice is graded on its reasoning.

AI-assisted, reviewed by the Just The Markets human editor: Beth Rue → Scored on reasoning Published

What it trains

Whether you can choose an entry, a stop and a share count that fit a swing setup and a written risk rule, and judge a trade apart from its result.

An order ticket asks for a price, a stop and a share count, and it is easy to fill in the first box with care and the rest in a hurry. The game grades all of them. Each round gives you a hypothetical swing setup in words, with the price, the levels, the volume, the earnings date and the account size, and you make each decision in turn.

How the scoring works

Every option earns 0, 1 or 2 points. The points go to the reasoning. A trade with a clear setup, a stop where the idea is proven wrong, and a share count taken from the risk rule scores full marks even when it loses, and a lucky trade with no plan scores nothing.

That can feel unfair. The result carries luck you cannot control, while the decisions are the part you can repeat on the next trade and the one after it. Read the feedback on the size first, because a stop hit on a correctly sized position costs you one unit of risk and nothing more, while the same stop on an oversized position can cost a month of gains.

The sum behind every size question

Size comes from numbers already on your screen.

The stop sets the size. A wider stop means fewer shares. A tighter one means more. The dollars at risk stay put. When the division leaves a fraction, round down.

Why the size decision carries so much weight

A run of losses is normal for any method. At 1% a trade, ten losses in a row costs about a tenth of the account. At 5% a trade, the same run takes out roughly 40%, and getting back from there needs a gain of about two-thirds, a hole deep enough to end a small account long before the method has had a fair test. The losing streak calculator runs the sum for your own rule.

Read after playing

For entries, read why a pullback on low volume is the kind worth buying. For sizing, see sizing for the losing streak you have not had yet. If adding to a loser is tempting, work through how averaging down moves break-even less than you think.

Score

0 / 30

Decisions made

0 / 15

  1. Round 1 of 5

    Pullback to the breakout level

    Account: $50,000. Your rule: risk no more than 1% of the account, $500, on any trade. A hypothetical stock broke out of a base at $37.50 three weeks ago on heavy volume, ran to $42 and has pulled back to $38.20 on volume below its 50-day average. Yesterday's high was $39. Earnings are five weeks away.

    Where do you enter?
    How each option scores
    • A, Defensible (1 of 2). The setup is valid, so buying has a reason behind it. Buying before the stock turns up risks catching more of the dip. Waiting for a trade above $39 costs a little on price and adds evidence that buyers are back.
    • B, Best reasoning (2 of 2). A move through the prior day's high is evidence the pullback has ended. The light volume on the way down says sellers were never pressing hard, and the trigger hands you a fixed entry to size from.
    • C, Weak reasoning (0 of 2). By $42 the stock has already made the move you wanted. The stop below $37.50 is now about $5 away, which shrinks the size you can carry, and you pay a second time for the same setup.
    With an entry at $39, where does the stop go?
    How each option scores
    • A, Best reasoning (2 of 2). If the stock falls back through the level it broke out from, the setup has failed. $37 sits far enough under $37.50 to clear ordinary noise, and it puts $2 of risk on each share.
    • B, Weak reasoning (0 of 2). A 10-cent stop sits inside a single day's normal range, so noise will probably take you out. A tiny stop also tempts you into a position far too big for the account.
    • C, Weak reasoning (0 of 2). A feeling gives you no price to size from, and the loss stays open-ended until you act, which tends to be late.
    • D, Defensible (1 of 2). A wide stop is at least defined. At $6 a share it forces a small position, and $33 sits far below the level that actually tells you the setup has failed.
    How many shares do you buy?
    How each option scores
    • A, Weak reasoning (0 of 2). 500 shares at $2 of risk each is $1,000. That is 2% of the account, double the rule.
    • B, Defensible (1 of 2). 125 shares risks $250, half the rule. That is defensible if you trust the setup less than usual, though the rule already allows 250.
    • C, Weak reasoning (0 of 2). 1,282 shares at $39 costs $49,998, nearly the whole account. If the stop fills, you lose $2,564, over 5% of the account on one trade.
    • D, Best reasoning (2 of 2). $500 divided by $2 of risk per share is 250 shares, a position of $9,750. If the stop fills, you lose 1% and move on to the next setup.

  2. Round 2 of 5

    Stretched, with a report in two days

    Account: $30,000, same 1% rule, so $300 a trade. A hypothetical stock has run from $60 to $80 in four weeks without a pause and sits 25% above its 50-day average of $64. Volume on the last two days is three times normal. The company reports earnings in two days. The nearest support is the 50-day average.

    Do you enter, and how?
    How each option scores
    • A, Best reasoning (2 of 2). Nothing here offers an entry. There is no base and no pullback, the stop would be far away, and an earnings gap is two days out. Passing costs nothing, and the stock will still be there after the report.
    • B, Weak reasoning (0 of 2). Buying 25% above the average two days before a report stacks a stretched price on top of an unknown gap. The chart gives you no level to lean on.
    • C, Defensible (1 of 2). A small size limits the damage, which is something. It is still an entry without a setup, and the size is doing a job the setup should have done.
    If you did buy at $80, where would a sensible stop sit, and what does it tell you?
    How each option scores
    • A, Weak reasoning (0 of 2). A $1 stop on a stock moving this fast will be hit by routine swings, and an earnings gap can open far below it. The small number is an illusion.
    • B, Best reasoning (2 of 2). That is where the chart would prove the idea wrong, and it is $16.50 away. A stop that distant makes any rule-sized position tiny, which is the chart telling you the entry is poor.
    • C, Weak reasoning (0 of 2). Holding through earnings with no exit lets the gap choose the size of your loss.
    What size fits?
    How each option scores
    • A, Weak reasoning (0 of 2). 300 shares at $80 is $24,000, most of the account. A 15% gap on the report costs $12 a share, or $3,600, which is 12% of the account and twelve times the rule.
    • B, Defensible (1 of 2). $300 divided by $16.50 is 18.2, so 18 shares risk $297 and cost $1,440. The sum fits the rule. A gap can still open below $63.50, and the position is too small to justify the setup.
    • C, Best reasoning (2 of 2). With no sound entry, the right size is none. After the report, a fresh base or a pullback to support gives you levels you can size from.

  3. Round 3 of 5

    A tight flag, three weeks before a report

    Account: $40,000, rule 1%, so $400 a trade. A hypothetical stock ran 20% in a month on rising volume, then moved sideways for eight days between $57 and $61 as volume dried up. Its relative strength line is at a new high. Earnings are three weeks away, and your plan says to be out, or at break-even or better, before any report.

    Where do you enter?
    How each option scores
    • A, Weak reasoning (0 of 2). Betting against a stock at a relative strength high because the price feels high fights the evidence, and your plan has no short setup for this chart.
    • B, Defensible (1 of 2). The trend supports the idea. Buying mid-range gives no trigger, so you cannot tell whether the pause has ended, and your risk to the stop changes with wherever the fill lands.
    • C, Best reasoning (2 of 2). A break above the flag high on rising volume is the sign that the pause is over. It also gives you a fixed price to measure risk from.
    With an entry at $61, what is the exit plan?
    How each option scores
    • A, Best reasoning (2 of 2). The range low is where the flag fails, and $56.80 leaves a little room under $57. From $61 that is $4.20 of risk per share. The report rule caps the gap risk you carry.
    • B, Weak reasoning (0 of 2). A 50-cent stop sits inside the range the stock has traded in for eight days. It will probably fire on noise before the setup has been tested.
    • C, Defensible (1 of 2). The stop is in the right place. Holding through earnings lets a gap jump straight past it, and your written plan wants you flat, or at break-even, first.
    How many shares?
    How each option scores
    • A, Defensible (1 of 2). 100 shares at $4.20 is $420, a little over the $400 limit. It is close, and rounding up still breaks the rule by 5%.
    • B, Best reasoning (2 of 2). $400 divided by $4.20 is 95.2, so 95 shares. That risks $399 on a position of $5,795.
    • C, Weak reasoning (0 of 2). 655 shares at $61 is $39,955. At the stop that loses $2,751, nearly 7% of the account in one trade.

  4. Round 4 of 5

    It gapped through the stop

    Account: $20,000, rule 1%, so $200 a trade. You bought 125 shares of a hypothetical stock at $30.50 when it cleared the prior day's high after a light-volume pullback to its rising 50-day average. The stop sat at $28.90, below the pullback low of $29. Next morning a rival's profit warning sank the whole group, the stock opened at $28.40 and your stop filled there. Loss: $262.50. Grade each decision.

    Grade the entry.
    How each option scores
    • A, Weak reasoning (0 of 2). Grading by outcome teaches the wrong lesson. The entry had a trigger, a rising trend and light selling on the pullback, and sound setups still lose some of the time.
    • B, Defensible (1 of 2). More confirmation is a fair preference. It would have made no difference here, since the loss came from overnight news that no chart pattern could have shown.
    • C, Best reasoning (2 of 2). Pullback on light volume, rising average, entry through the prior high. Each part was written down before the order went in, which is what makes the trade possible to grade.
    Grade the stop.
    How each option scores
    • A, Best reasoning (2 of 2). $28.90 was under the pullback low, so a trade there meant the setup had failed. A gap past a stop is a known cost of holding overnight, and the stop still held the loss to $262.50.
    • B, Weak reasoning (0 of 2). A gap opens wherever the news puts it. A wider stop would have cost more on normal days and done nothing about the warning.
    • C, Weak reasoning (0 of 2). With no stop, the position would have stayed open while the group kept sliding. Stops cap ordinary losses, and gaps are the exception you size for.
    Grade the size.
    How each option scores
    • A, Defensible (1 of 2). The overshoot is real: 1.31% of the account against a 1% rule. It came from the gap, which no size could foresee. If this stock gaps often, sizing slightly under the rule is a reasonable adjustment.
    • B, Weak reasoning (0 of 2). 200 shares at $1.60 of risk is $320, or 1.6% of the account. Sizing up to make a trade feel worthwhile breaks the rule every other decision rests on.
    • C, Best reasoning (2 of 2). From $30.50 down to $28.90 is $1.60, and 125 shares times $1.60 is exactly $200. The size came from the rule, and a single loss of 1.31% is easy to survive.

  5. Round 5 of 5

    A base breakout on a half-percent rule

    Account: $60,000. After a losing streak you cut your rule to 0.5% a trade, so $300. A hypothetical stock has built a six-week base between $95 and $100 on shrinking volume. It trades at $99.80 today, with the pivot at $100.10 and the base low at $95. Earnings are seven weeks away.

    Where do you enter?
    How each option scores
    • A, Defensible (1 of 2). Buying a touch early saves a little money and risks owning a base that never breaks. Without the trigger you are guessing at the timing.
    • B, Weak reasoning (0 of 2). At $106 the stop under the base is $11.40 away, more than double the risk from the pivot. You pay for certainty with a worse price and a smaller position.
    • C, Best reasoning (2 of 2). Clearing the pivot on strong volume is the event the base was building toward. It gives a clear entry, and the base low gives a clear place to be wrong.
    Where does the stop go?
    How each option scores
    • A, Defensible (1 of 2). A defined stop counts for something. It sits inside the base, where the stock has swung for six weeks, so ordinary movement will probably take you out.
    • B, Best reasoning (2 of 2). Below $95 the base has failed. With entry at $100.10 the risk is $5.50 a share, enough room for the breakout to wobble without stopping you out.
    • C, Weak reasoning (0 of 2). Adding to a failing breakout puts more money on the part of the trade that is going wrong, and it leaves the loss with no limit at all.
    How many shares?
    How each option scores
    • A, Weak reasoning (0 of 2). 109 shares is the old 1% figure, $600 divided by $5.50. It risks $599.50, twice the rule you set for this stretch.
    • B, Weak reasoning (0 of 2). 599 shares at $100.10 is about $59,960, nearly everything. At the stop the loss is $3,294.50, about 5.5% of the account.
    • C, Defensible (1 of 2). 55 shares risks $302.50. Rounding up by one share is a small breach, and small breaches are how rules drift.
    • D, Best reasoning (2 of 2). $300 divided by $5.50 is 54.5, so round down to 54. That risks $297 on a position of about $5,405.

People also ask

How do you calculate position size for a swing trade?

Multiply the account by the share you are willing to lose on one trade, then divide by the distance from your entry to your stop. With a $50,000 account, a 1% rule and a stop $2.50 below the entry, that is $500 divided by $2.50, or 200 shares. Round down, never up.

Is a losing trade a bad trade?

Only if the decisions behind it were poor. A trade with a defined setup, a stop at the level that proves it wrong and a size set by your risk rule can still lose, and a string of such losses is normal. Judge the entry, the stop and the size on what you knew when you placed the order.

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