Forex trading contests are the type of competitions where we use our demo accounts. Usually, there is no entry fee, it is just required to follow basic regulations of the competition. This is not something new for most traders and this type of trade is mainly created for people who are new in forex trading. For some traders, it might be a good way to get a name out there, opportunity to improve your skills, get a prestigious title, or win a significant amount of money.
Previously, it was not super easy to find these contests but today we can find numerous trading contests on the internet if we look hard enough. Sometimes it takes signing up for a broker that we don’t want to sign up for, so that’s not always very appealing to people but a lot of contests do payout, they might pay cash, they payout credits towards that broker. There are a lot of things that we can potentially get by competing or winning at these contests.
Are those competitions represent a true test of skills when it comes to the real thing? What might be unfortunate about them is that almost all of the time people who actually win them or even place in the top ten for that matter are not really good forex traders. What might be certain is that this concept of competing is not rewarding traders who play the long game, the long term trading with consistent returns, and optimal risk management.
In a span of one, maybe two months, the person who finishes first can often achieve an ROI of anywhere from up to like 2500%. For some people, this might not sound crazy but for those traders who are fully entrenched in the right way of trading, this might be completely ridiculous. Successful traders tend to say that proper money management in these trading contests is not only not rewarded, but it is completely frowned upon. Taking the wild chances and hitting them might be the name of the game, therefore it does not mimic real-life forex trading at all.
Most of these competitions tend to look alike a huge poker tournament with people who are not playing a real-life poker. Instead, let’s say that this tournament is going to be only thirty minutes long and whoever has the most chips on the table at the end of thirty minutes wins the entire tournament. Can you imagine what that would look like? Probably every person at the table would be going all-in every single hand because they would have no choice. Everybody would have to play haphazardly and whoever got the luckiest at the end of the tournament would win and be rewarded for that. That is why most high-profile traders avoid this format of competition or any similar way of competing.
People win these tournaments by achieving exorbitant crazy figures, but there is actually a very tiny bit of skills involved in there. It might seem that there is nothing there that we can observe like a rational forex trading. So for someone who wants a little bit of fun participating in some of these contests, you guys go right ahead, you are absolutely allowed to do that. But even if we do tremendous, we mustn’t allow the things we did to place well in some tournaments affect our actual trading. Reckless style of trading every once in a while is not what we are going to recommend here.
Although this might be the quickest way to distinguish ourselves from everybody else and make temporary results, we believe it is much better to consider long-term trading and make people good money. We don’t want to build up our reputation by being a mediocre long-term trader that just happens to know how to win a contest. We want to become extremely good at this, that’s the key.
Forex trading contests are not for long game players. We need to put the time in because it’s very part of the definition of playing the long game. If we put ourselves too early on the marketplace with an unfinished product and not really designed for proper forex trading, we might be doomed. Traders should stop to look for a fast lane because it is not a way to go, they need to be patient and allow the system to develop. Eventually, they would have come out with much better product years down the road. So stay on the course traders, it’s worth in the end, do it right.