

Ask HN: Any material on algorithms for a stock exchange simulation game? - digamber_kamat

I am trying to build a small stock exchange simulation game (web based). This will be used to train some young students in India on how exactly the whole trading mechanism works.<p>I was wondering is there are any open-source CMS type system already available in in domain. But more than that I would appreciate if someone can point to me any books/blogs about the stock market simulation experiments.
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trotsky
Just my opinion, but I think I would consider using historical data, perhaps
munged by a coefficient to make it harder for a player to identify the
historical basis using a few trades. Market psychology is notoriously finicky
and feels like it would be poorly represented by an algorithm to me. This
would have the added advantage of simulating some price action based on things
like news, earnings, current events etc. I think I would tend to pick gentle
bull market period, or perhaps concatenate a couple of cycles to make a bull
market->correction->recovery cycle. It all depends on what your goals are of
course, but one bonus is that unlimited historical data is all out there and
easy to get (so you could pick many periods or even have the computer pick
them). A long time ago I participated in a stock market simulation that was
run this way, at the end it was revealed what the actual stock basis was for
the tickers and it was pretty interesting to be able to go back and look at
some of the news around those stocks from the time period.

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lbarrow
If you're looking for a literal stock exchange game, the Wall Street Journal
runs a reasonably good one called the virtual stock exchange at
<http://vse.marketwatch.com/Game/Homepage.aspx>

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veyron
" how exactly the whole trading mechanism works." <\-- different exchanges
have different rules and restrictions, even within a country (for example,
there are special parity rules in NYSE which violate NASDAQ's "price-time
priority" rules). And different countries have different rules, such as the US
stock markets with Regulation NMS. Can you be more specific about which
exchanges you want to work with?

"point to me any books/blogs" <\-- Larry Harris Trading and Exchanges
<http://tradingandexchanges.com/>, a little bit outdated but still my favorite

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swah
Are they actions of buying and selling be the sole driver of the price?

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digamber_kamat
Real stock markets work that way (so we believe) but a simulation engine need
not make it work that way main reason is that our initial user-base will be
very small and that wont result into major changes in the prices and hence
they will get bored pretty soon.

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cheddarmint
I think you could go one of two ways with this:

1\. Consume live market data and use an exchange simulator that always gives
you back a fill. 2\. Use a true exchange simulator, which you will have to
seed with orders to provide liquidity and generate real quotes (with a proper
spread and not locked or crossed).

With the second approach, you get a more accurate representation of how
markets work, but the exercises will have to be more planned out and directed.

Just my $0.02.

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instakill
I'm looking for something simliar. Execpt i want to do something along the
lines of Empire Avenue.

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jmmcd
The search keyword you want is "Santa Fe market simulator".

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theclay
If only you could outsource this job to India...

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hoffmanc
If one exists, it should use BitCoins as currency. FTW

