Our recent myth-busting article on the topic of choosing the best forex broker for you appears to have spurred quite a discussion, which is testament to the popularity of online retail forex trading. It seems that there are a lot of you out there who are actively seeking for a broker in order to gain access to the online forex market.
Another conclusion, derived from the feedback we received on the particular post, was that many are also interested in participating in forex contests, thus our advice that bonuses and contests offered by brokers should be approached with due caution, has met with considerable resistance.
Today, we are exploring exactly the topic of forex live contests, as well as that of forex demo contests, to shed further light on what they are, if participation holds any significant advantages and once you do decide to take part, what you should do in order to maximize your chances for success and claiming victory in a forex contest.
Why do brokers hold Forex Live and Forex Demo Contests?
Before explaining further all about forex contests and what’s in it for you if you decide to take part, we want to first explain why forex brokers organize such competitions. Though the rationale and motive may be obvious, it is good to highlight that holding a forex demo contest, or a forex live contest or even both, falls under the wider efforts of brokers to increase their reach out to growing numbers of prospective or aspiring new traders. In short, such competitions are viewed as an effective method for brokers to inject new blood in their client base. This is based on the assumption that once lured into to compete in a contest with real prizes, it will be easier to then turn an individual into a regular trader, trading via a funded live account.
This explains why there is an abundance of forex demo and forex live contests on offer, since may brokers are now including such competitions in their offering. Forex contests however, especially forex live contests, participation in which requires traders to have a real, funded, trading account, are not geared towards novice traders, but rather act as an additional venue for seasoned or even professional traders, to directly compete with others, flaunt their skill, test their strategies and win prizes while they are at it!
What are demo forex contests and what you should know before registering to enter?
Demo forex contests are competitions, usually free to enter, which offer prizes as incentives for the winners. In order to take part, you need to register for a demo account with a broker, since, as implied by their name, demo forex contests are run through forex demo accounts and thus no real money is involved in the process.
Before entering into a forex demo contest, you should be aware that each broker organising such a competition sets their own specific rules and regulations governing it, which determine who is entitled to participate, how the contest plays out and how can prized be earned, claimed and redeemed. Make sure that you understand all the rules and adhere to what they stipulate or else participating would be just a waste of your time and effort, since non-compliance means disqualification.
Usually the rules governing such contests are straightforward and simple, since they simply aim to create a level playing field, ensuring that all participants are treated fairly and equally and have the same chances for success. One common such rule is that each contestant is only allowed to take part through one, single demo account and that only one such account is allowed per IP address.
What are the advantages of demo forex contests?
Though demo forex contests are primarily targeted towards novice traders to get a feel of how real forex trading works, it is not uncommon for expert traders to enter such competitions for a chance to earn a prize, without risking any real funds. This being said, those standing to gain the most benefit from participating in a demo forex contest are surely novice, inexperienced traders, since through such contests, they:
- Are encouraged to come to grips with the forex market and how trading is done. This will not only offer them substantial forex knowledge, but also equip them with tools, both physical and mental, they shall be needed if they intend to seriously take up trading in the future.
- Can gain an insight into the psychology of real trading, since competing in a demo contest differs from the virtual trading they engage in through their demo account. Though there is still no risk of losing any real funds, the competitive environment pumps up the volume and heart rate, while the prospect of winning or losing prizes, raises the stake and creates conditions resembling those of real, live trading.
- Can test, and correct or improve their strategies before applying and showcasing them in the real forex market, where real money would be at stake.
- Can gain self-confidence as traders and earn rewards they can boast about without risking anything.
The obvious benefits of demo forex contests for novice traders render such competitions extremely popular amongst those starting out their journey into the forex world, since they can sharpen and polish their skills and boost their confidence and morale, while gaining a tangible and real feel of the trading rush. Once a novice trader amasses enough experience through demo forex contests, they can try their hand and skill at forex live contests too.
What are forex live contests what you should know before registering to enter?
Having explained what demo forex contests are and what novice traders stand to gain by participating in such competitions, let us now turn to examine what forex live contests are.
Forex live contests are organized by forex brokers and are competitions addressed to real traders, who hold real, funded, forex trading accounts. Such contests are held at regular intervals, either on a daily, weekly or monthly basis. Their stark difference from demo forex contests is that in this case the actual trading takes place through real, funded accounts and therefore real money is at risk with every trade placed.
Forex live contests occur on Forex brokers’ websites and those choosing to enter them essentially participate in a competitive event, where each trader’s skills and ability to win trades and make profits comes into a head to head comparison, with the performance recorded by the other contesting traders. In the end, the winners are those who can produce the best comparative results, and they end up being rewarded with fabulous prizes, on top of the profits made through the actual trading transactions. Moreover, often brokers offer cash rewards as prizes to forex live contests, while others reward winning traders with additional bonuses which they can use for trading on their real forex account.
As in the case of demo forex contests, before entering a forex live trading contest you should ensure that you read, understand and accept all the relevant terms and conditions governing the event, as usually each broker-organizer, sets a different set of such rules and criteria. Also, to be able to take part in such a competition, you need to have a live trading account with sufficient funds deposited to be able to place the trades.
What are the advantages of live forex contests?
Traders are drawn to live forex contests for many reasons, which stretch far beyond the obvious appeal of taking away a coveted prize. The rush and excitement that come with competing in real time with traders from around the world, provides an unparalleled thrill and the potential to unlock both more trading profits, as well as prize rewards, all make up a pretty irresistible combination.
Let us try to explore what are the main advantages of forex live contests in the eyes of seasoned traders, which make such competitions so popular:
- The trades in the competition take place under real market conditions, and the rest of contesters one is competing against are also real, usually expert traders, thus rendering the whole endeavour a true test of skill and mastery, and give added value and prestige to those who manage to rise at the top.
- The thrill and competitive spirit that runs through such contests give impetus and motive to traders to strive to excel and push their trading capabilities to their utmost, as the stakes are higher than when trading outside the competitive environment.
- Trading simultaneously and directly against other traders is a much different experience than solitary trading, and most traders are eager to demonstrate their skills prove their talent in front of others.
- Besides providing a venue for testing strategies and polishing trading skills, forex contests actually reward those worthy, i.e. those traders who can endure the heat of the competition and prove their trading superiority.
In a nutshell, forex live contests are perfect way for traders to know how their skills measure up against those of other traders and provides them with a great way to gauge and evaluate themselves as traders, since under normal trading conditions performance comparisons are not possible. And as already stated, if successful in such a contest, a trader does not only take away the profits derived from the successful trading transactions, but also the great prizes on offer, a great boost in their self-confidence and the prestige that comes along with the title of the winner, the one who managed to outrank the rest and land at the top.
What Can Help You Win a Forex Contest?
Having demonstrated the distinct advantages to be had through forex contests, it becomes evident that unlike sport, in this case it is not just competing and participating that counts, but actually winning as well. This is because competing on a live forex contest, means you are trading with real money and thus both the stakes and the inherent risks are significantly than when trading, for example, in a demo forex contest.
If you can win a forex live contest, it means you take the prizes on top of the profits made from trading, but if you lose, it means you don’t only forgo the prize, but would have probably sustained some real monetary losses as well.
Another point that some may miss out on, is that a trader who manages to win a forex contests, does not only boost their own self-confidence, but the win may also attract the attention of the broker as well, who may well decide to further reward the trader’s proven skill and talent and offer even better trading terms and conditions to them.
Therefore, you should aim to win, not only to avoid losing, but because winning comes with added perks. However, you shouldn’t trade recklessly aiming to win at all costs, because this might increase your risk exposure, but instead trade smartly, wisely and prudently.
To assist in the pursuit of victory in a forex contest, we have the following tips to share that we believe you should pay particular attention to, if winning is your ultimate goal when entering such a contest, as it should be:
- Choose the right competition and the right broker
Though this tip is kind of self-evident, we shall tackle it first, because if you don’t choose which competition to enter carefully, then there is a great chance that your efforts will go haywire. As already pointed out, there are many forex contests out there, organized by a vast number of different forex brokers, each being governed by its own set of rules, regulations and requirements. Therefore, before entering a forex competition, do your homework and only trust competitions organized by reputable, transparent, honest and serious brokers, who will live up to their end of the deal and will run a fair contest, also quarantining to also deliver the promised prizes with no problem or trouble. It is also important to find out and fully understand the rules of each contest and make sure you fulfill all requirements and follow all the rules, as non-compliance, leads to disqualification and blows your chances for victory.
- Take it slowly
It is not uncommon in forex contests for the majority of contesters to be out of the competition just a few hours after it starts. The mistake they make to meet this predicament is that they rush to take the lead in the competition from the beginning and to do so engage in trades that are much riskier. When such high-risk trades fail, their trading balance is wiped out and they are out of the contest.
In order to avoid this mistake, our tip is that you take your trading, especially at the initial stages, slowly and steadily and only undertake risks that are calculated, and which will not end up wiping out your balance. Success takes patience and method and a very good assessment of the actual risks involved in each trade.
- Manage your money and your risks well
As can be derived from the first tip, your chance at succeeding and attaining victory at the forex contest, is tightly linked to your ability to conserve your capital and not wipe it out fast through reckless and risky trading decisions that are much more resembling gambling rather than wise and prudent financial trading. A sensible risk-reward ratio to adhere to, would be that of 1:2.
Time helps you learn how to evaluate risks more accurately and allows you to acquire the right time-management and risk-management that are essential to lead to forex contest success.
- Keep your calm
Another very useful trading skill that can be mastered over time is the ability to also manage your emotions well while trading. Your mental, emotional and psychological state when trading can catapult you to the top or throw you in the abyss. You need to have the right attitude towards both your trading and the competition itself, not let stress get to you and keeping your calm.
Greed and fear, are your two most important enemies when it comes to the emotions of a trader and they are the ones you should try to master the most. A greedy trader may not close a winning trade on time and end up losing it, while a frightened trader may lack the self-confidence needed and rush to close a trade prematurely, also resulting in the loss of funds.
Discipline and patience on the other hand, will go a long way when it comes to your journey towards trading and forex contest success.
- Keep your method and stick to doing it your way
As when trading outside the competitive environment of a forex contest, the importance of having a good, solid, pre-defined trading strategy that makes sense to you and which you can effectively follow and apply cannot be stressed enough. The absence of a trading strategy is a sure recipe for disaster and failure, especially under contest pressure and conditions.
Being consistent and sticking to your strategy is also very important and a common mistake made by many newbie traders is switching strategies often, jumping from one to the other, thus wrecking any chance for eventual success.
Your strategy may require some adjustments once you identify parts of it not working, and you could make such changes as you go along. It should not be rigid, but clear and consistent and no matter how flawed it proves to have been, trading with a strategy will always beat trading with no strategy at all.
- Keep a clear record
To discourage you from making any irrational trading decisions, which are not governed by logic but mostly by emotion, it makes sense good sense to have down a trading plan, as having it down makes it more difficult to ignore and deviate from it.
Moreover, in order to be able to effectively and reliably track your progress, it is also sensible to keep a clear and detailed trading journal, where you will be recording your actions and decisions. You can revisit such records in order to identify positive trading habits and patterns that proved successful.
To neatly sum up, forex contests both in their demo and live versions, seem to be like a good idea and a good opportunity for traders, both novice and pros, as they are indeed an exciting way for one to learn hands-on how the markets work and trading goes, shape and sharpen their trading skills and prove to themselves and others if they’ve got what it takes to be successful traders. The icing on the cake being that all these can happen while also sweeping up some amazing prizes as rewards for achieving top rank in the contest itself. However, we shall return to our original piece of advice. Just because forex contests could potentially unlock both trading profits and prize winnings for a participant, doesn’t mean you jump head in. Caution is once again due, not only in picking the right type of contest to enter, but also to ensure you remain cool headed in the process and loyal to your strategy, trading smartly and not erratically in order to maximise your chances of winning a demo or live forex contest and be able to boast about your win.