Ivan Delgado is a decade-long Forex Trader. Feel free to follow Ivan on Youtube. Join thousands of traders who follow Ivan's insights to increase their profitability rate by learning the ins and outs of how to read and trade financial markets. Ivan has you covered with in-depth technical market analysis to help you turn the corner.
Today marks the beginning of Global Prime’s first ever monthly trading competition, this time only in Demo accounts. In this article, I’d like to list a series of thoughts that would make your experience as part of this competition a meaningful one and hopefully you won’t fall victim of the common pitfalls that come with such contests.
For many years, unethical brokerage firms have engaged in dubious marketing tricks to lure the uneducated into trading contests. At Global Prime, we set up this competition due to popular demand while we want to leave it clear that the performance in these demo competitions tend to be an illusion of what can be achieved in a real live account.
If you are really serious about trading financial markets and you envision staying in this game for the long-run, you owe it to yourself to read carefully what I’ve laid out below and in some form or another, keep it in mind along this month-long competition.
Just because you are trading off a demo account where money is not real, it doesn’t mean you should engage in reckless trading ‘hoping’ to get lucky. Consider it a great chance to show where you are at in your game by respecting to the smallest details the way you’d be trading with real money. Allow this demo contest to manifest the best of you, to promote your best practices in trading habits and not the wrong mindset where you buy into an illusion. If you wouldn’t trade the same way you did in the demo contest in a live account, that’s a major red flag that what you are engaging on is gambling.
These competitions tend to be very popular among new Forex traders because they are lacking the real capital and because let’s face it, they are also the most inclined to not adhere to fix trading rules. Why? Because they probably still are in the ‘self-discovery’ phase, plus find this competition a way to get a dose of ‘thrill’. Dangerous! If you are after that stimulation, how about you trade in the same way you would but look to turbo-charge gains? That’s a smarter way of still treating the competition as a serious endeavour.
In the long run, it will be way more beneficial that you treat these trading competitions in the way you envision yourself making it as a consistently profitable trader. Do not alter any areas you’ve perfected over time (risk control, psychology, patience, technical edge, you name it). There are hidden dangers in acting reckless in a demo competition that may leave scars and backfire if you’ve made progress as a trader and want to use this opportunity to re-engage in a more gamble-type mentality just because you aim to shoot the lights out and win the prize. In the long run, that can cause more damage than good.
I wholeheartedly believe that a 1-month trading competition cannot bring to the surface the best of a trader. It can either give you some glimpses into the trading style they have or it can mesmerize you altogether and blind-fold you by what really happened in the winner’s account. Chances are sky-high (I hope I am wrong) that the winner of this competition would engage in extremely risky bets (all-in) and eventually get lucky enough that some of the big gambles pay off. That’s why one can often see a $10,000 account and in one month turn it into a $100,000. It captivates traders but the actions that led to this sum are probably going to be highly speculative. If not, we’ll be lucky to have found the next Super Trader housed at Global Prime!
Just as a business wouldn’t change its business model, winning traders, when they go through tough patches, they don’t either. They tend to assess performance metrics by quarters. However, since trading competitions encourage to deliver results within a 1 month window, it is perfectly possible that an experienced and very solid trader ends up under performing another one that gets lucky yet in a 12 month comparison, there would be little dispute on who gets to be more consistent in the delivery of results.
… Throw into the mix much more sophisticated trading competitions in real live accounts. This is the first of hopefully many, and make no mistake, we do intend to tailor future ones for experienced traders too. The type of competition to include more smarts such as drawdown limits, best risk control practices, extend the competition to one quarter, is coming. We are just getting started and will make sure we can structure it in a way that is more akin to serious trading down the road.