If you have been around trading for any length of time, you will know that there are many demo trading contests you can enter.
But which is better for you as a trader? Is it better to enter a demo trading contest or enter a live trading contest?
Click play on the video below to see which is better.
As you can appreciate, we are biased to the live trading contest for several vital reasons.
1. A live trading contest tests your real skills with real money on the line.
When you have real money on the line, you trade differently. There is no sugar coating this. When real money is on the line, your emotions are also riding on every single trade.
2. A demo trading challenge uses fake money, so your emotions are not riding on any one trade.
What happens to your thinking in a demo account if you can see you are well behind the leaders and you want to try and catch up? Is it ok to place a trade that carries a much higher risk than you would in real life? Of course. If you are trading on a demo account and you triple the size of your risk, it doesn’t matter if you lose, as it is not real money. Demo accounts are for getting used to the trading platform, the price feed and setting up your environment to get ready for live trading.
3. Demo trading contest winners have to make several thousand percent return to get to the top 10.
As a result of not having real money on the line, traders will often trade larger positions relative to their account size to get to the top 10. Many winners in a demo trading contest will make 5,000%+ returns, and to get into the top 10 will often require 2,000% or more. This is unrealistic.
4. The rewards for a live trading contest are better in the 2020 Trading Cup versus other online MT4 demo trading contests.
As a contestant in the 2020 Trading Cup, you can contend for a total prize pool of $US150,000. Each stage has $US10,000 up for grabs and the grand final is split between the top three for a total of $US90,000. Many demo contests have a total of $5,000 or $10,000 up for grabs. Plus, you cannot keep the returns you make in a demo contest, whereas the money you make in a live trading contest is yours to keep. On that note, it is essential to realise the losses you make are real too. You need to balance the risk versus reward and make sure a contest of this nature suits or risk profile.
5. The skills you pick up from competing in a live trading contest can be applied to your real money trading account.
This is the biggest one of all. You are entering a trading contest and testing your skills against live traders in a live contest. As a trader, you will continue to refine your trading methods based on the results you get. A 1-month trading contest is a great way to set a goal to achieve a specific return and take those learnings to the next level.
This is the reason so many of the Trading Cup contestants enter every single monthly contest, for six straight months. They refine their skills based on the learning of the previous months' results and apply that to the next trading contest.
Are you ready to join the next Stage? Click here to register an account.
Ashley Jessen is the author of CFDs Made Simple and Head of Marketing at ACY Securities. He has been in the financial services industry since the year 2000 and worked for some of the leading companies in the CFD, Forex and Online Trading space.