Why? You get virtual trading contests without real money which is not really trading because – we all know, many traders can win in a demo account but won't win in real time trading because having money at risk makes trading for “real” harder. There are a few virtual contests online and many cost nothing to enter so if you want some fun then you can try.
Trading Contests – A Great Marketing Tool for FX Brokers
The trading contest is also a popular way of luring new accounts for brokers and they are done for a reason:
There mostly short term lasting a month or two and the broker knows in this short term time frame, traders will go for the prize so they will over leverage and a few, will get lucky and fluke a big trade which can then be promoted, to show how easy money is to make in Forex trading – its a great bit of marketing for them!
Lets put it I perspective – the top traders in the world, at some point with their trading signals will lose for a few months but of course, this isn't want brokers want to promote. They want people to believe anyone can do it and also, show some results to show the potential. The brokers in Forex today act like online casinos and simply want to appeal to the greed of people and present currency trading as easier than it really is. I know someone who won a trading contest with no strategy at all they got lucky on two trades and made 455%! This was a virtual contest with no money on the line but they were so convinced, they would do the same in real time. They open a trading account with $10,000 and then, managed to wipe it out in two weeks.
There are some real money contests around where you actually have to put down cash and these are real acid test for a traders ability and many last a year which is a far better time frame to judge a track record over. It's still not long enough though and when, were looking for money managers here, we wouldn't consider one which is not 3 years long and we prefer 5 years.
Fun Maybe But What is Your Aim from Trading Forex?
Some traders just like the thrill and excitement of trading and its fun to them to try these contests but in my view, trading currencies is a serious occupation – it's not fun, its a serious profession.
Is there a best trading contest? Its down to personal preference really but when I look at these contests and prizes ( which are never very big) all I see is yet another way the Forex industry is starting to look like online gambling which of course it isn't but you wouldn't think so when you look at brokers and they way they present trading to potential customers.
We have an obsession with traders wanting to be social and in many contests you have a forum where you can brag about what your doing or comment on others peoples trades. This is ridiculous - Forex trading is a solitary profession and any great trader wouldn't dream of commenting on another trader or bragging about his track record in the markets.
I think currency trading contests are a waste of time, of no use in terms of providing an accurate gauge of how a trader will perform over the long because the duration is to short and I really despise the way brokers promote them and then show the track records and say anyone can do it. They also allow you to follow traders on your own account so you can blow it up! If you are a serious trader avoid contests, get a trading education, work out your trading edge and focus on making money for your trading account and don't pay any attention to other traders strategies or results.