Seeing The Forex As A Trading Contest

With competition in forex increasing day-by-day, futures commission merchants (FCMs) and the accompanying Introducing Brokers (IBs) are fast dealing out prizes and incentives to any new clients walking in. The monetary bonus is easy, simple and it works, with firms gladly paying up $250 around to a new client who comes in looking at the offer. The other incentive is to provide rebates and grants on the tuition for the clients who decide to take up one of the courses offered by the firm. Another recent fashion is to hold trading games where players trade with virtual accounts and the winner gets cash or the opportunity to trade with real cash.

You are reminded of the times when one could open a Certificate of Deposit in a bank and come home with a TV or a toaster to boot. Has this been in the pipeline for forex retailers then? A firm that wants to beat the competition with a few incentives to prospective clients and trading game winners might be doing the right thing, but it should also understand that the real competition is not in other firms but in the hearts of the traders themselves.

With winning trades as the main objective, the traders of forex pit their trading acumen to test every day against the market itself. Yet, how would it look like if these regular wars were turned into a sequential range of matches? First we have the trial testing period in which the trader will try out the plans and the strategies s/he intends to use in the real trading.

The period of simulation finally stops and a mini-account phase begins, where real money (but only small amounts) is at stake. Finally, there'd be a trading game having real great giveaways. This stage makes the adrenaline pump harder than ever as each pip has the secret to a $10.00 win, or a loss. It certainly adds up for any size account. Trading competitions should have the different periods incorporated in them as well as a few challenges at every stage as the game progresses.

Instead of their current design, contests involving simulated accounts should look to award performance in trading that achieves diverse goals. The participant with the highest average pip per winning trade can be rewarded with a prize. How about a prize for the trader who has the lowest average pips per losing trade?

For example, we can have a contest where prizes go to traders who achieve 10 or more consecutive winning trades of 10 pips or more. This contest then would search for consistent traders. There can be many types of prizes for instance, a winner can be made to trade in proprietary capital and some others can be given cash prizes.

But it is not necessary to wait for the contest to be announced for the trader to begin. You have no issue in actually making your trades as if it were a competition. Anyone can create his own contest by simply listing trading goals, then setting out to achieve them. Any trader in forex, irrespective of having a demo, mini or a real trading account, can win by achieving the following.

There can be 7 trades that give you a mean of more than 50 pips, 7 trades that win at a stretch, 60% wins more than losses with either 25 or 50 round turns, or perhaps 3 trades worth more than 50 pips in seven days. A month's drawdown must be within 20% and a stretch of consecutive losses should not go more than three losses. Then, you have to have 50 trades consecutively that have a risk of 2% only per equity per trade and still give you profits.

Choose four pairs of currency from ten different financial press releases (these occur roughly at 8:30 a.m.EST) and trade in them for three days, with profits. Besides being a marketing device, a trading competition can easily be used to measure your talent as a forex trader. The goal of traders should be to mark improvements in themselves and go ahead through discipline and consistent performance. All traders ideally have predetermined standards by which they check their growth.

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