The last few months I have received a number of comments and emails about Forex trading competitions. Until recently, I had no experience with these Forex contests (I had never entered one!). A few weeks back, I noticed that GDMFX were hosting a Forex demo trading competition through myfxbook. I signed-up and am currently ranked 255th out of 4442 contestants with a 38% return on $10,000 (not bad for 5 minutes every 2 days for 10 days). Below are my thoughts about the competition and Forex contests in general...
Thought #1 - Forex Demo Trading Contests are not Realistic
No matter what place I finally rank in the competition, it means nothing. The reason why it means nothing is that these competitions are not realistic at all. When I first started, I thought I had a good chance of making the top 10 but the returns of the top 10 contestants are currently ranging from 2197%-6495%! Yes, that is 4 digit returns in 10 days of trading. These returns are totally crazy. Even my 38% return in 10 days is not realistic.
I believe that these contests should be viewed with a pinch of salt. The high returns are not sustainable and Forex traders in these competitions are risking far too much capital per trade.
Will I enter another Forex demo contest? Yes. Why? Because they are a lot of fun. That is the only reason and that is how I believe these competitions should be viewed, as some fun.
Thought #2 - Forex Competitions are not a Learning Opportunity
Due to the competitive nature of these contests and due to the fact that they are demo trading competitions, there is very little trading psychology and emotion to battle. I believe there is as much - if not more - to learn trading through a demo account than trading in a demo account contest.
These competitions are not a learning opportunity. Once again, they are just a bit of fun.
Thought #3 - What would make these Contests Better?
I have 2 ideas that could make Forex contests better (in my opinion)...
Idea #1 - All contestants trade live accounts not demo accounts. These accounts would be funded with contestant capital. The amount would need to be small enough that Forex traders would sign-up for the contest but big enough that there would be an emotional attachment to the capital. I believe this would make the results much more realistic and the competition much more challenging. Perhaps 100-250 USD?
Idea #2 - As the contest would be with real funds, the host could offer much bigger cash prizes and more of them.
Have you entered any Forex trading competitions? What has been your experience?
You can email me at firstname.lastname@example.org
You can view my myfxbook profile here.