Overview

Making large returns within a week of trading or even a month only says so much about a trader's performance. Strong traders are consistent and can perform well over long periods of time. However, in order to attract new members and keep interest levels high, Equitrader must continue to run competitions of relatively short timeframes. To solve these seemingly conflicting goals, Equitrader created a competition called the Capital Quest.

Capital Quest competitions operate on top of regular Equitrader competitions. Each Capital Quest is made up of one or more underlying regular competitions, typically all of the rated competitions that run in a six month period. Therefore, traders participate in the Capital Quest simply by participating in Equitrader's weekly, monthly or quarterly competitions. Not every competition will be part of the Capital Quest. Please review the Capital Quest details to see which competitions are included.

Scoring

Each participating trader acquires a Capital Quest score that is based on their performance in the individual competitions using the following formula:

1. For each competition in the Capital Quest that the trader has participated in, take the trader's score for that competition.
2. Compute a score for the S&P 500 (including its Risk Factor) for that competition. This will be used as a performance benchmark.
3. Subtract the benchmark score from the trader score to acquire a benchmark-adjusted score. Multiply the adjusted score by the competition weight to acquire a weighted score.
4. Typically the competition weight will simply be 1.0, resulting in no change
5. The sum of these weighted scores forms the trader's total Capital Quest score before taking into account participation.

Putting these rules all together, the final formula for the Capital Quest score is: Capital Quest Score = ParticipationFactor* (Sum of [(Trader Score - Benchmark Score) * Competition Weight] for each Competition in the Capital Quest

Participation Factor

The Participation Factor adjustment corrects for traders who don’t compete in many contests. Each trader will have a ParticipationFactor which will be between 0 and 1.0 that will be multiplied by the sum of the Trader’s adjusted score from each contest. The trader gets 20 participation points for each MTC and 60 for each QTC. The trader’s participation factor is: MIN(Participation Points/RequiredPartipationPoints,1.0)

The RequiredParticipationPoints will be 120 for the typical 6 month contest with 2 QTC and 6 MTC, but may be different for Capital Quests of differing lengths. Examples: Competing in both QTC’s or all 6 MTC’s will get a ParticipationFactor of 1.0. A Trader who competes in only 2 MTC’s will receive a ParticipationFactor of 40/120 = 0.33. A trader who competes in every contest will receive the maximum ParticipationFactor of 1.00.

Registration implies Participation

A trader’s Capital Quest score will consider all CQ contests in which a trader registered instead of all contests in which a trader participated. Additionally, the benchmark adjustment will only be applied if the trader participated or the Benchmark finished positive (and the benchmark adjustment is negative). If the trader fails to participate and the benchmark finishes negative, the trader gets a score of 0 instead of the benefit of the adjustment.

Examples: If two traders register in a contest where the SP500 finishes with a score of -100 but only one competes, the trader who competed will get an adjusted score of (baseScore) – (-100) = baseScore + 100. The trader who does not participate gets a score of 0.

If the SP500 finished with a score of +100, the trader who competed gets an adjusted score of baseScore – (100) = baseScore – 100. The non competitor gets an adjusted score of -100.

Prizes

There are two types of prize structures supported in the Capital Quest competitions: fixed prizes and variable prizes. Fixed prizes are awarded based solely on the final ranking, such as $1,000 for 1st place, $500 for 2nd place and $250 for 3rd place (figures are for example purposes only). Variable prizes are awarded to the top X finalists, where X is a configurable parameter for each Capital Quest. In this case the prize purse is distributed to each finalist based on the percentage of their score versus the sum of finalist scores. For example, if $5,000 were to be paid to the top 10 finalists and the first place winner held 20% of the points that the top 10 finalists had scored, then the variable prize for that trader would be $1,000 (20% of $5,000). A Capital Quest competition can include none, both, or just one of these prize types. In the case that both are used, the final prize for each winner will be the sum of the fixed prize and the variable prize. The Capital Quest Standings page will display the projected winnings for the current finalists even as the competition is still in progress. A positive (greater than zero) Capital Quest score is required to be eligible for prizes.

Tips

To do well in the Capital Quest competitions, traders should:

1. Minimize their losses. Since the Capital Quest score is a sum of scores from all contests, large negative scores can dramatically decrease the trader's Capital Quest score.
2. Beat the market. Since the Capital Quest score is adjusted against the S&P 500 as a benchmark, it isn't good enough to simply have a positive return. The Capital Quest score will only increase if the trader's return is greater than the index return.
3. Compete often. The more competitions you compete in, the more chances you have to increase your Capital Quest score.