By: Charley Warady
Many would claim that the ultimate Forex trading contest is the trading itself. Much like a golf game, it's not actually the golfer against the other players, but rather the golfer against the course. Forex is not a team sport. Unless you and your friends have an incredible amount of money, you're not going to be able to team up against the Forex market. At least not long term.
So the question arises, naturally, if all you want to do is make money from trading Forex, then why would anyone even suggest having a Forex trading contest? It could be like the World Series of Poker where the prize is so large, it's worth it to compete. But even with that, the premise is really the same as a Forex trading contest.
The prize is ego
Forex traders, along with many other professions that involve risk, involves a certain influx of ego. That's not necessarily a bad thing or a good thing; it's more of a simple fact. So, as is true with any ego driven venture, the money becomes only a way of keeping score. And as long as you're keeping score, you may as well try to be the best. And as long as you're trying to be the best, you may as well have a Forex trading contest.
The grand prizes aren't great sums of money. As a matter of fact, a few of the contests are all run on virtual money and prizes through demo accounts. Trading the Forex market doesn't always have to be about making money. It can be the thrill and fun of participating in a Forex trading contest. It's a different kind of adrenaline rush, and one that won't risk your house or car.
The catch
Most of the hosts that run a Forex trading contest are brokers. And the brokers that run the contests require you to have an account with them. Getting involved in a contest should not be the deciding factor as to why any Forex trader selects his broker. It shouldn't even be in the considerations. However, if you discover that the broker you have selected is hosting a contest, then it can be fun to get involved.
Many of the prizes offered are in cash. However, even then there is a catch. The cash prize is put into your trading account and there are stipulations as to when you can draw that cash out of your account. It works the same way as when a broker offers a trader “cash back” or “cash bonus” for initial deposits.
There are a couple contests that have an entrance fee, and with those the prizes are in actual cash. It's more like a poker contest. And there are those that are just for fun. They are also run by brokers as a distraction for their traders.
In all cases, the Forex trading contest is about pitting yourself up against a bunch of other people trying to be the best. Any person that has participated in a fantasy league knows what it's like. There is a certain amount of luck and just because someone wins the contest doesn't mean they're going to necessarily be great Forex traders. One thing has so very little to do with the other. They shouldn't even be viewed as related. A Forex trading contest should be just that; a contest. Nothing more.