Recap: Reflection on winning the ASX PT Competition and Lessons Learnt from the US PT Competition
Hello mooers,
What a whirlwind season of paper trading this has been. Thanks to everyone who participated, you certainly didn’t make it easy! I managed to rank #1 in the ASX competition and was #1 in the US competition (until 24 hours prior to it concluding) – more details on this below.
I began my investment journey 15 years ago after graduating fresh out of uni with a Finance degree. Although this gave me a step up over most people my age who hadn’t completed finance related tertiary studies or well versed in quantitative analytics methods, I quickly realised I had a lot to learn in the world of stocks, ETFs, CFDs, options and other financial instruments available. Back then we certainly didn’t have the myriad of investment tools, live data availability and definitely no AI models to assist our decisions like today. Moomoo has certainly progressed my learning with simulations such as Paper Trading by putting my trading techniques into practice and learning from my mistakes without material consequence. I therefore am very grateful for @Moomoo AU, as this platform has allowed me to hone my skills as an informed investor.
What a whirlwind season of paper trading this has been. Thanks to everyone who participated, you certainly didn’t make it easy! I managed to rank #1 in the ASX competition and was #1 in the US competition (until 24 hours prior to it concluding) – more details on this below.
I began my investment journey 15 years ago after graduating fresh out of uni with a Finance degree. Although this gave me a step up over most people my age who hadn’t completed finance related tertiary studies or well versed in quantitative analytics methods, I quickly realised I had a lot to learn in the world of stocks, ETFs, CFDs, options and other financial instruments available. Back then we certainly didn’t have the myriad of investment tools, live data availability and definitely no AI models to assist our decisions like today. Moomoo has certainly progressed my learning with simulations such as Paper Trading by putting my trading techniques into practice and learning from my mistakes without material consequence. I therefore am very grateful for @Moomoo AU, as this platform has allowed me to hone my skills as an informed investor.
My strategy explained
My strategy in this competition was to focus on fundamental analysis primarily and use technical indicators for managing exit positions. I knew, unlike the US competition where options could be leveraged heavily to benefit off volatility, the ASX competition could be won picking a handful of high performing stocks. From the get-go, I knew many traders would jump on the DRO.AU bandwagon. While it was tempting to join them for a quick gain, I opted for a more calculated approach, focusing on stocks with strong fundamentals and potential for sustained growth. I believed there could be a sharp correction on this stock – I had a plan and decided to stick with it… I utilised some ‘good old fashioned’ stock valuation techniques incorporating AI to help retrieve these indicators and managed to find some stocks that I believed had been oversold.
My strategy in this competition was to focus on fundamental analysis primarily and use technical indicators for managing exit positions. I knew, unlike the US competition where options could be leveraged heavily to benefit off volatility, the ASX competition could be won picking a handful of high performing stocks. From the get-go, I knew many traders would jump on the DRO.AU bandwagon. While it was tempting to join them for a quick gain, I opted for a more calculated approach, focusing on stocks with strong fundamentals and potential for sustained growth. I believed there could be a sharp correction on this stock – I had a plan and decided to stick with it… I utilised some ‘good old fashioned’ stock valuation techniques incorporating AI to help retrieve these indicators and managed to find some stocks that I believed had been oversold.
This was done using the following strategies:
• Proactive - Company Financials: Considering the company's earnings, revenue growth, and overall financial health. Using techniques such as Forward PE, PS and PB ratios and utilising AI to generate updated ratios and metrics.
• Proactive - Market Position: Assessing (and reassessing) the company's competitive position within its industry.
• Reactive - Recent News and Announcements: Evaluating any recent company news, such as earnings reports, product launches, or other significant events that might impact stock performance.
I had also been following the BNPL and Healthcare/Pharma industry closely prior to the competition, which allowed me to make an informed decision quickly (information is power). These industries are higher risk but were suitable for the competition given the short term investment horizon. They also had potential for larger rises as opposed to some of their more established competitors. It was also important at some stages of the competition to deploy capital preservation techniques and selling stocks that met my target price to preserve the margin already realised. These techniques included rebalancing, where I adjusted my portfolio to maintain my risk tolerance; hedging in the US competition to protect against volatility; diversification to spread risk across sectors; profit-taking to lock in gains; and maintaining cash reserves for flexibility. This proved particularly helpful early August where I thankfully predicted a change in macro-economic conditions (recessionary fears and BoJ interest rate rise). Sticking to these principles allowed me to succeed and ensure that I had an edge over the competition.
My top 2 performing stocks were:
*Below analysis provided by @Moomoo AU
$Clarity Pharmaceuticals Ltd (CU6.AU)$
• CU6.AU rose by 17.53% in July and has increased by over 180% since the beginning of the year. In April, Clarity announced that a prostate cancer patient had achieved a "complete response" after two cycles of Clarity's 67Cu-SAR-bisPSMA treatment, with no detectable levels of cancer in the six months following the treatment. This news was well-received by investors, and the ASX pharmaceuticals stock has been on an upward trend since then.
• Furthermore, there were reports that CU6.AU will soon be meeting with the US Food and Drug Administration (FDA). The company is preparing for a discussion with the FDA regarding an approval study in patients with biochemical recurrence of prostate cancer. If approved, 64Cu-SAR-bisPSMA would directly compete with currently marketed PSMA agents.
$Clarity Pharmaceuticals Ltd (CU6.AU)$
• CU6.AU rose by 17.53% in July and has increased by over 180% since the beginning of the year. In April, Clarity announced that a prostate cancer patient had achieved a "complete response" after two cycles of Clarity's 67Cu-SAR-bisPSMA treatment, with no detectable levels of cancer in the six months following the treatment. This news was well-received by investors, and the ASX pharmaceuticals stock has been on an upward trend since then.
• Furthermore, there were reports that CU6.AU will soon be meeting with the US Food and Drug Administration (FDA). The company is preparing for a discussion with the FDA regarding an approval study in patients with biochemical recurrence of prostate cancer. If approved, 64Cu-SAR-bisPSMA would directly compete with currently marketed PSMA agents.
$Zip Co Ltd (ZIP.AU)$
• The Zip share price also performed well, gaining 30.8% in July. Zip was added to the benchmark index during the month, and its share price surged following a successful capital raising and the release of its quarterly update.
• The market was impressed by Zip's strong profitable growth in the fourth quarter, which likely contributed to its share price increase. Additionally, its inclusion in the ASX 200 index would have attracted interest from index funds, as they need to adjust their holdings to reflect the changes in the index.*
• The Zip share price also performed well, gaining 30.8% in July. Zip was added to the benchmark index during the month, and its share price surged following a successful capital raising and the release of its quarterly update.
• The market was impressed by Zip's strong profitable growth in the fourth quarter, which likely contributed to its share price increase. Additionally, its inclusion in the ASX 200 index would have attracted interest from index funds, as they need to adjust their holdings to reflect the changes in the index.*
Below, you can see the performance charts for my top two stocks, CU6.AU and ZIP.AU, illustrating their upward trends and key moments during the competition.
Favourite Moomoo feature
Although not so much in the ASX competition, one of my favourite features of Moomoo is the visualised AI data. This was particularly helpful for options trading and helped me pick opportune times to close positions. I was fairly new to options trading however managed to learn quickly using Moomoo’s option trading course.
Although not so much in the ASX competition, one of my favourite features of Moomoo is the visualised AI data. This was particularly helpful for options trading and helped me pick opportune times to close positions. I was fairly new to options trading however managed to learn quickly using Moomoo’s option trading course.
Lesson Learnt
I deployed breakout investment strategies, identifying stocks with the potential for rapid price movements, which helped me climb to the #1 position in the US competition. 24 hours prior to the competition ending I closed out my positions however this proved not quite enough with @Drgon Empty Drg leveraging volatility index futures perfectly in the last trading session – well played!
Final comments
I’d like to congratulate everyone on their performance and look forward to Season 3 of the competition. Although I couldn’t go into extensive detail with all of my techniques, if anyone has questions or wants to discuss trading strategies in the future I’d be happy to help where I can.
I’d like to congratulate everyone on their performance and look forward to Season 3 of the competition. Although I couldn’t go into extensive detail with all of my techniques, if anyone has questions or wants to discuss trading strategies in the future I’d be happy to help where I can.
Good luck for Season 3! ![]()
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Laine Ford : no comment what I reading
juujuuu Laine Ford : For too abundant?
juujuuu : Nice catch bruh. It's really helpful![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Night Owl : What is AI techniques such utilising AI to generate updated ratios and metrics, @JMack89 ? Can you please elaborate more on where to get them??
JMack89 OP Night Owl : You can use all the common LLMs (GPT-4, LLaMA, Mistral, ChatGPT etc) to calculate price ratios and valuate a stock. It was just a more efficient way of doing things, so I could present the data the way I wanted it and it worked for me. Eventually I want to train my own model for charting capabilities as well.
Night Owl : Really? What specific keywords do you use to ask the common LLMs to valuate and calculate the price ratio?
CasualInvestor : utilising AI to generate updated ratios and metrics.
Also interested in how you did it. Always good for an alternative perspective. I’ve also been using my ChatGPT but different prompts will have differing results.
JMack89 OP CasualInvestor : I got the LLM to retrieve the earnings from online sources and advise as an experienced investor what valuation method they recommended. I also got it to generate python code to retrieve live data when refreshing my metrics. This resulted in a strategy considering the following metrics:
1. Current Market Price (CMP)
2. Price-to-Earnings (P/E) Ratio
3. Earnings Per Share (EPS)
4. Market Capitalization
JMack89 OP Night Owl : I got the LLM to retrieve the earnings from online sources and advise as an experienced investor what valuation method they recommended. I also got it to generate python code to retrieve live data when refreshing my metrics. This resulted in a strategy considering the following metrics:
1. Current Market Price (CMP)
2. Price-to-Earnings (P/E) Ratio
3. Earnings Per Share (EPS)
4. Market Capitalization