Overview: By participating as part of the trading crowd in an FTS interactive market you will learn fundamental concepts in finance from personal trading experience.
Anatomy of a FTS Case: In each trading case the price discovery problem is tied to the learning objective. In this way two important properties associated with financial markets, arbitrage and efficiency, drive learning in an FTS trading session. For example, suppose the learning objective is the time value of money. If someone in the trading crowd is not applying this concept correctly when trading then some other trader exploits this in an efficient market.
Performance evaluation: Unlike the real world, time in the virtual FTS trading world is case specific. For example, a trading trial covering ten years may be completed in 15-minutes of FTS trading time. This allows trading performance to be measured relative to long run performance in each trial. Based upon this performance grade can then be assigned taking into account both participation and average rank within the trading crowd across repeated trials. An example of a weighting scheme is 70% for participation and 30% for relative performance. In this example, a trader who ranks first in every trading trial earns 10/10 and a trader who ranks last in every trial earns 7/10. Of course attaining 10/10 is very difficult in a competitive classroom trading session over repeated independent trials.
FTS Cases by Markets