In addition to the rewards, forex trading contests are packed with other intangible benefits. Most of them deal with your skill and experience in trading.

The prizes for winning trading contests are often the first thing that comes to a trader's mind. Questions such as "how much is the prize?" and "how can the prize be withdrawn?" are frequently asked by traders whenever a forex broker announces their latest contest.

As one of the most effective promotional tools for forex brokers, it's not surprising that trading contests are treated similarly to a bonus program. However, trading contests are unique as they don't only promise financial benefits, but also present an opportunity for traders to improve their skills and competitiveness. First, let's discuss briefly what trading contests are.

 

Getting Familiar with Trading Contests

Trading contests are promotional programs in the form of competitions, usually held by brokers or their third-party affiliates, in which traders compete with one another to generate the highest returns within a predetermined period of time. The criteria of ing a winner vary between trading contests depending on the regulations set by the organizers.

Trading contests can be classified as demo contests or live contests. As the names imply, demo contests involve trading on demo accounts whereas live contests are carried out on real accounts. Let's see the differences between them in the graphic below.

Types of trading contests

Aside from the obvious money prize, let's time to talk about the four invincible perks of trading contests:

 

1. Trading Contests Help You Hone Your Trading Skills

Unlike bonus programs that hand out gifts to traders, trading contests require traders to compete to be the best. The process of course makes it more difficult to claim the prizes, but this is exactly why trading contests are beneficial for traders' growth.

The competitive nature of trading contests can push you to learn a lot of trading knowledge, including how to adjust your trading strategy for various market conditions. For example, winning a daily contest where speed is important is obviously different from winning monthly contests where patience is the key. Thus, you need to apply a day trading strategy to the former and a swing trading strategy to the latter.

Furthermore, by competing with other traders, you can also train your ability to trade under pressure. Tight rules and deadlines often require traders to think very carefully and thoroughly about what strategy is best used in the specified time period.

Many traders who frequently enter trading contests also think that such competitions can improve self-discipline. As they are strongly motivated to win the prizes, they tend to be more careful in money management. The rules, while strict, help traders to control their actions and emotions.

For novice traders, demo contests are highly recommended as a must-try learning medium. Why? Considering that the reward can be realized into a trading credit to be used in the real account, contestants will view profit and loss calculation in a more serious manner. Thus, trading contests can be a good representation of how traders should approach the real market.

 

2. You Will Gain Trading Experience

It's undeniable that you can gain invaluable experience from trading contests. You will get the chance to compete with other contestants from all over the world. Whether they are amateur or pros, aggressive or conservative traders, you will find a wide variety of traders with their own trading styles.

forex trading contests

As the saying goes, experience is the best teacher. A real experience like this gives more valuable insight to the market for it will teach you advanced lessons and new skills that you can never acquire when trading alone with no competition in sight.

 

3. You Can Objectively Measure Your Trading Ability

Some traders are complacent about their profit growth. Every now and then, however, you need to check on other traders and compare your trading performance and achievement to theirs. Why? So you can get a new perspective on your strengths and weaknesses. And there is no better method to measure your skills and abilities than trading contests.

You can compare your skills with other traders, and take lessons from traders whose performances are proven to be more superior. This way, you will always find the motivation to improve yourself. This kind of attitude is needed in the ever-changing condition of the forex market.

 

4. Trading Contests Provide a Means to Trade without Deposit

This benefit applies particularly to trading contests on demo accounts. Forex demo contests always attract large crowds since there is no financial risk even if traders fail to win the contests. Most brokers allow you to enter a contest for free, and the contestants use virtual funds in their demo accounts.

Traders who generate the highest returns at the end of the contest period will be named the winners and are entitled to the rewards promised by the brokers. In short, this is a win-win situation for traders. Either you lose a contest but still gain invaluable experience, or you win a contest and claim the prize as well as acquire the experience.

Demo contests often offer prizes in the form of trading deposits on live accounts which can be used in real markets. This benefit automatically makes trading contests an alternative solution to start forex trading without money. Another most common method to do this is by taking advantage of no-deposit bonuses that are usually offered in a few forex brokers.

 

How to Benefit From Trading Contests

There are some useful tips you can implement in order to take full advantage of trading contests. What are they?

 

Start with Demo Contests

No matter how attractive the rewards are in forex live competitions, you need to make your first step on demo contests. This is very fundamental. Before diving into the live contest and risking real money, you should familiarize yourself with the competitive atmosphere of trading competitions, and there is no safer way to do it than joining a demo contest.

It is true that live contests offer more attractive prizes, but never try live contests if you don't have any experience in demo contests. The financial risk is real, and you are up against pro and seasoned traders who are not shy to shell out big capital to win the contests. Your chance of winning, as a newcomer, is very slim.

 

Understand and Follow the Rules of the Game

The rules and regulations of trading contests are not to be trifled with. Violating even one rule may lead to severe consequences such as disqualification and revocation of prizes. Always adhere to the terms and conditions determined by the brokers.

Fyi, one of the most violated rules of trading contests is the "one contestant one account" rule. Many traders want to increase their opportunity by opening several accounts and using VPNs to trick the broker. However, there will be always some ways for the broker to find out this kind of scheme and penalize the participant.

 

Choose Contests That Fit Your Trading Condition

For example, if your broker organizes several competitions at once, you better choose a competition in which the rules, regulations, and conditions are well-suited to your trading capability. Do not make the prize the main reference point when choosing which competition to participate in. Different contests require different strategies. If you are a swing trader, scalping contests are best avoided and vice versa.

 

Calculate the Duration Wisely

Another important aspect is the contest duration. Your approach should correspond to the specified length of time. In long-period trading contests, patience is the key. It is not advisable to chase high returns immediately after the contest starts.

Many participants tend to be eliminated within the first 24 hours if they are too ambitious to get into top positions. On the opposite, traders who start slowly will gradually climb the ladder and displace the contestants who want to stand out at the beginning. This aggressive style is very risky and will only lead to a defeat.

Now, short-period contests are another story. They often require the competitors to be more aggressive and attempt to make profits as soon as an opportunity arises.

 

Control Your Emotions

Emotional control is in fact the main weapon for professional traders to win trading contests. So if you want to be a winner, get used to trading with a cool head. Trading forex without time restriction is enough to make traders stressed, let alone trading with a deadline. This will lead to more psychological pressure which will potentially force inexperienced traders to make bad trading decisions.

 

We have presented four perks of forex trading contests that you may have not realized at first. Now the choice is in your hands. Do you want to focus solely on chasing the rewards? Or do you see trading contests as a means to improve skills and gain experience?