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I Can’t Win Trading Competitions

Discussion in 'Forex Discussions' started by Currency Expert, May 22, 2014.

  1. Currency Expert

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    “We’ve seen plenty of traders over the years make huge returns on their accounts, well over 1000 per cent in a relatively short period of time, but as soon as they hit a drawdown period they just as quickly give it all back. This is because they were trading well beyond risk limits in the first place.” – Charlie Burton

    The currency markets have many benefits that are no longer secrets: the biggest daily turnover, inability of Smart Money to control the markets permanently to their favor, interesting fundamentals, high liquidity, 24-hour availability, low spreads, etc. As a result of the increasing popularity of the markets, many types of programs are coming up in the financial industry; and one of them is trading competitions.

    I once participated in some of the competitions and never won a single one. In spite of my trading knowledge, I’ve never even ended in the top 50, not to mention the second or third position. Why?

    On demo and live accounts, I don’t usually risk more than 0.5% or at most 1% per trade. I need to do this consistently so that it becomes my second nature. Trading is a game of survival, but in those kinds of competitions, even if I make 2000 pips in a month, my profits would only be 10% or 20%. Now, someone else could make less than 500 pips in a month and achieve 500% profits. The difference lies in the amount of risk per trade. Can you now see why I can’t win a trading contest?

    In most competitions, a contestant who achieves the highest returns within the shortest time duration is usually declared the winner. A trading competition - usually a demo accounts competition – tends to last for one week or one month only. Every competitor thus strives to achieve hundreds or thousands of percentage of returns during the short period. I’ve seen a competition in which a participant made 3000% returns in less than one week! I’ve seen a trading competition in which a participant made 700% returns in a month. Does this means they’re the most proficient traders on the planet? The answer is NO.

    When the market is favorable to your trading method, you’ll be making money with new orders, no matter what. A winning streak can last for days, weeks or months, before it’s alternated by a losing streak (before another winning streak comes again). It’s too common that most people who make money in winning streaks give back more than their profits during losing streaks, as a result of excessively high stakes and lack of risk control methods.

    Most types of trading competitions encourage people to make the highest possible money as quickly as possible. This kind of indoctrination can’t favor traders that aspire for a lasting career. Just as speculators who get hundreds of percentage of profits because of excessively big position sizes, but soon they’re no longer in the markets; one who risks too much per trade is a gambler, but one who takes risk control method serious is a real trader. When a competing gambler is in a winning streak, she/he can make hundreds or thousands of percentage returns when 20%, 30%, 40%, 50% or 60% (or more) of the portfolio is risked per trade. Nevertheless, the higher the stake per trade, the higher the loss or the drawdown when something goes contrary to the trading method. That’s why some of the so-called expert traders or trading champions later crashed and burned in the markets. They’ll still tell you trading is great and they can trade very well, but they’re no longer in the markets because their suicide trading methods backfired at them.

    Would you prefer to get rich quickly and have a temporary career or would you want to make small and constant gains? What matters most to you: the safety of your account or big profits as soon as possible?

    There are also certain trading competitions in which organizers rule that winners must accurately predict the exact price of a particular trading instrument within a specific period. Isn’t that hard? Market wizards all agree that future prices can’t be predicted, yet we can harness gains from them. How can I predict the exact future prices when I’m not clairvoyant or psychic? If psychics could even do that, I guess they’d have become billionaire traders. Should you predict an exact future price within a specific period and win, it is by pure chance.

    The Types of Trading Competitions I Can Win
    There are types of trading competitions I can win, but sadly, they’re not that common in the Forex world.

    I can win a trading competition that rules that winners would be those whose accounts are still intact and positive after making 1000 trades (or at least 500 trades) within some years. How many gamblers can win that type of competition? I can win a competition that gives awards to those who achieve the least amount of drawdowns after several months or years. I can win a trading competition that recognizes contestants who makes most pips, not most profits within several months.

    Yes, if that kind of trading competition allows contestants to compete for 10 months or even years, I can win it. One week or one month is definitely too short to test the reliability of a trading system.

    A good trader is someone who deals with losing streaks successfully and recovers from them, not someone who makes great profits in winning streaks and crashes in losing streaks.

    The most important thing a good trader can do is to keep an account permanently safe in the face of the vagaries of the markets. Making profits is a secondary aim, for there must be an intact capital before profits can be made. If the capital is gone, there’s no means of carrying out additional transactions that could be successful. One best way of keeping our accounts safe is to learn how permanently victorious traders have managed to keep their portfolios safe for decades.

    Conclusion: Most speculators who’ve made billions of dollars from the markets have become extremely rich because their portfolios are huge and they make relatively small, consistent gains. They haven’t become billionaires because they achieved 100% gains over and over and over again within very short time periods. They achieve their aims by looking for low risk investment opportunities, and capitalizing on them by giving their winners enough leeway. This is easier said than done, for most traders find it difficult to run their winners – it’s really difficult. But it’s essential for long-term survival.

    This article is ended by the quote below:

    “Pace yourself, take small gains and small losses, trading is not a sprint towards riches, it’s a marathon towards financial independency.” – Alesh Patel

    Source: www.tallinex.com
     
  2. orni308

    orni308 New Member

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    its better you should concentrate on your trading rather than winning contest, once you are experienced you can win them, but with so many experienced trader winning a contest is not easy.
     
  3. platinumtraderfx

    platinumtraderfx New Member

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    Yeah I also think that trading contests is a waste of time and it just distracts you from building your own trading way. Though you can join them in your spare time, be sure that you stick to your trading plan. remember i won once Hotforex contest and got 2000$ as a bonus in my account. It was a great boost to my trading capital, but I think it was pure luck and it won't repeat twice..
     
  4. Airborn

    Airborn New Member

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    trading competitions are good to proove your trading strategy is better than others. it can help to find weaknesses and maybe enchance strategies effectiveness. Moreover you compete not only with the market but with other people, fun doubles!
     
  5. jologs

    jologs New Member

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    it really depends on the trading contest, lets say demo contests have this extreme way of trading and i mean the highest level of extreme where traders generate crazy numbers and usually we dont do that on live hahaha. but to sum it all up its always fun joining contest, its a stress reveler for me
     
  6. vic84

    vic84 New Member

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    It doesn't matter if you win competitions or not, its a good indication that you still have to learn a lot and that you are not mature enough to trade in real account.
     
  7. jologs

    jologs New Member

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    yes even joining trading compititions doesnt mean you gain nothing if you dont win, we always gain new things knowledge, exp and the process of trading is a never ending process of learning.
     
  8. somefxtrader

    somefxtrader New Member

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    Of course any trade you make on forex is a source of experience providing that you are trying to get something out of it, for example analysing losses why it happened or seeking for events that contributed to gain. In my MercerFx account I am always striving for good trading day, at least one trade on fundamental and one technicial, thankfully low spreads and A book execution without slippage gives me quite tolerable trading costs..
     
  9. platinumtraderfx

    platinumtraderfx New Member

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    There were some cases when I managed to win Hotforex demo contest. It was unbelievable because there was very tight and aggressive competition so I pulled all stops out to reach my main goal - to win..
     
  10. Arif

    Arif New Member

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    Demo contest ?

    what was that ?
     
  11. vic84

    vic84 New Member

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    Winning competitions is not necessary your concentration should be on making consistent profit and to avoid loss and improving your skills.
     
  12. Fxtrader88

    Fxtrader88 New Member

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    May be the point is that contests were not very good. I mean the rules, the trading conditions of brokers that organized these contests etc. It's worth trying one from Freshforex. This contest with cash prizes, so you can withdraw them.
     
  13. AwaberA

    AwaberA New Member

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    Why can't you do it? Maybe you took part in the contests organised by unreliable brokers? Try FreshForex's Great Trading Contest and you'll change your mind about the contests.
     
  14. Sharon Higgins

    Sharon Higgins New Member

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    It’s surprising that most people are going by their own suggestion of contest, but is it really that? I believe it’s not everyone who is actually capable enough to win a contest, so it’s not just about which contest we participate, it’s about our skills level which often let us down. I trade with OctaFX broker where I get great advantage with their demo contest like cTrader, it’s awesome with 400 dollar to be won while we can participate every week, so gives brightest opportunity as far winning is concern.
     
  15. sininfinity

    sininfinity Active Member

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    Well lots of experienced traders and high risky EAs participate in a trading contest. If those high risky EAs don't blow up those accounts normal traders don't have much of a chance.
     
  16. AwaberA

    AwaberA New Member

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    Now is the right time to trade oil. Many traders generate good income here. It is true that not all brokers have contracts for oil. Among the brokers offering to trade in oil, Freshforex has a diverse set of CFD contracts. Now this kind of trade allows you to get a profit in a short time.
     
  17. tiptip

    tiptip New Member

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    Contests are not a waste of time. I have seen many traders winning big in this contents, like a trader is preparing to win the latest FreshForex BMW on the Great Contest trading. Contests are great if you are good at trading, otherwise it may be challenging
     
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