Forex contests - is it worth participating in?

The growing popularity of the Forex market means that brokers have to outdo each other more and more in their marketing activities to attract new clients. A very popular way of promotion are forex competitions, more or less investment. High-value material prizes, cash reaching tens or even hundreds of thousands of zlotys, exclusive holidays or even funds for management - these are the most popular incentives for brokers.

However, as with competitions, the more popular, the harder it is to win. So is it worth spending some time on them?

Forex competitions - the main idea

The great interest in de facto competitions translates to our advantage, because it increases the probability of subsequent editions and a growing prize pool. Let us not be under any illusions. For broker (or companies from any other industry) is primarily advertising and promotion of its services, which aims to attract a new group of customers. Nobody invests money in promoting the contest and in high prizes just because they don't know what to do with the money. He does it primarily because he is counting on a return on this investment.

Let's not delude ourselves that during the competition we will learn something that will be useful to us later in real trade. Usually, participating in some kind of competition is stressful in itself and there is pressure to "get the result". In order to have a real chance of winning, you need to play very aggressively and forget about the basic rules of safe capital management. Only the headlamps count.

The most common criterion for selecting a win is the rate of return, i.e. the highest profit earned against the initial capital. Other key criteria, such as the ratio of this profit to a capital loss, effectiveness and other parameters showing the investor's skills, are very rarely taken into account.

Let us not delude ourselves that the competition will select the best trader. Usually, the duration does not go beyond one month, and largely favorable trend (or lack thereof) does 90% of work and then we can talk about luck, not long-term, stable multiplication of funds on the capital market.

Demo contests and real

As a rule, demonstration competitions attract a much larger number of participants than those using real funds. The reasons are obvious. At the demo, we risk our time at most and we can trade all the time using 100% lever. In real measures, our rational thinking (unless someone has the soul of a gambler 🙂) will hinder us in this and we will rarely take a similar risk.

READ NECESSARY: Broker competitions and promotions

It is impossible to directly assess where there is a greater chance of winning. To a large extent it will depend on our skills, market situation, luck, and even the scale of promotion of the competition itself. The competition will be bigger on the demo, and less random on real capital.

Awards

Awards - what attracts people and why they take part in competitions. In recent years, there have been various fancies such as

• Luxury and sports cars,
• Big cash prizes (50-200 thousand PLN),
• Electronic equipment (laptops, tablets, smartphones),
• Abroad trips,
• Capital for management,
• Other, less typical.

More and more often you can meet with the so-called flyovers, where, in addition to the main prizes, you can receive a bonus for the best daily or weekly result. This definitely increases the attractiveness of competitions, as well as the chance to receive any prize.

In the case of competitions on virtual media, there is nothing to indulge, because the risk / potential win ratio is always favorable. However, if the competition takes place on real funds, it is worth recalculating whether it is worth participating in it and if so, how aggressively. There may be a paradox where, during the competition, we will risk funds with a value exceeding the value of the main prize (I'm not talking only about the initial deposit but also about the capital + earned profit during the competition).

It is also worth reviewing in detail the rules of the competition, both in terms of selecting the winner and details about the prize (extremely important in terms of capital management rewards), because it may turn out that ultimately the same win, burdened with many conditions and exclusions does not look like this anymore attractive as in the advertising slogan.

The forex market contests are set

Often such accusations are made after the end of competitions. In fact, it does occasionally happen brokerzy they exclude someone from the top, referring to certain points of the regulations. Sometimes it seems to be a stretch, sometimes on the contrary - it is evident that the delinquent deserved it. Of course, we will not know the whole truth in 100%, because the broker will not be able to reveal details, and the trader will do everything to whiten his activities. Remember that it is the broker who sets the rules, and we have to stick to them when declaring our willingness to participate, period.

I have personally won a lot of different Forex contests, both on demo and real accounts, where the prizes were of little to no value. If we follow the provisions of the regulations, we have nothing to fear. Obvious manipulation of the results is not an option - the organizers are aware that such action could bring dire marketing effects, so this is a risk not worthwhile.

Summarizing…

So is it worth taking part in competitions? It depends. If we are just starting our adventure with the market, we certainly should not try to compete on real funds. The chances of winning are low and the risk of losing some or all of your capital is quite high. On the demo, we lose nothing except time, and it is always an additional lesson in trading under the influence of greater emotions, and we should learn to control them. After all, it is worth establishing a specific strategy and goal - whether we have ambitions to fight for the main prize or are we looking for a way for a more real volatile bonus.

If, however, we already know what and how on the market, we have our strategy, which is effective in the case of real competitions, we still have a pure calculation of whether it is worth risking our capital playing aggressively. Let's not get carried away, especially if at the end of the competition we are in the lead. It can often be seen that in the last days of the competitions in the top ten, the largest rotation is made, especially if the difference between the results is small.