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Important suggestions for the next MyFxBook trading competition...

TreeTox
Sep 19 2012 at 10:34
posts 7
It's always great to have these trading competitions, as it encourages people to focus, to learn, and it also attracts users to this website en-mass and is a great promotional campaign for the sponsoring broker.

However, I usually get put off rather quickly as the trading ground rules and limits are simply not clear enough (at least from what I've been able to see).

The thing that irritates me the most is that you'll have these traders who will take a gamble, bet the maximum amount of lots they can on a few trades - and suddenly be up 1500% in a couple of hours/days - of course invariably they blow up their accounts but it creates skewed ranking tables and a false atmosphere of temporary 'success' for people at the top.

The only way to remedy this gambling is to have a hard limit on the maximum number of lots any account can trade with however big that account gets. This way, the competition will be fairer, and garner more interest as the truly sensible traders will feel that it is a realistic competition where true trading skill is being evaluated, measured and benchmarked against others. With real money, the unrealistic and silly risks people take would just not occur. Once you have a gambler with a 'run-away' trade which puts them 2000% ahead of about 95% of other co-traders in a competition, whether we 'know' they might blow up or not, it cuts down interest as the sensible trader from the 95%, who is trying to show his real skills and risk-management, gets turned-off. This very quickly results in people in a competition leaving en-mass as they know they do not have a realistic chance of catching up with the unrealistic 'top performers' who might win the competition not through skill but through luck.

Site Admin: PLEASE consider making sure that the next competition actually has some sensible constraints (ie maximum lot size), and clear explanations of how much trades and how leverage will work. By doing so, you will create a tighter competition where more people will feel like that their taking part is actually worth it, as they might have a chance of winning - plus you'll have more people visiting the site, so it's ultimately good for the site/you.

LK Wong
lkwong
Sep 19 2012 at 11:45
posts 71
Great suggestions, but you see, those are not 'best practices' that brokers (sponsors) are encouraging. :) The question you should be asking yourself is :

How do brokers make money ?

TreeTox
Sep 19 2012 at 12:19
posts 7
That is true. Same with the spread betting companies who sometimes have 'shady' practices. However, I still think that the brokers would get more exposure if out of the 3,000 registered people for the trading competition, say 1000 actually stayed on, fighting a tight daily battle with other traders, trading realistically, using their platforms every day, visiting the broker website every day, visiting MyFXBook every day and so on - actually feeling a realistic competition instead of a silly game which it is now. The way it is now, most people will blow their accounts out of frustration or fall so far behind, that they just switch off from taking the competition seriously and stop - this is happening to me.

First few hours/days of the competition you had these people who suddenly were 1000% ahead. It got me angry and I jumped in, thinking, I'd have to play that game to stay in the top 20 or something. They got burned, I got burned. Now my account size is almost unrecoverable, and I'm demotivated, and will not visit the site again till the next competition as there are not many other reasons for me to come back apart from once or twice a week to read the forums or use the trade analysis tools and so on. Sure, some of it is my fault (!) but it was because there were no constraints on the max lot amounts that can be traded that made me frustrated while a few random gamblers just fly on ahead...

Both MyFXBook and the sponsoring brokers have lost competitors' interest.

DrVodka
Sep 19 2012 at 13:59
posts 297
is only a DEMO . trading style should be adjusted accordingly that`s all i can say . . get over it 😇

TreeTox
Sep 19 2012 at 14:33
posts 7
Don't worry - I'm over it - but that's the sad thing - there will be many many people who'll get over it and this will defeat the purpose of the competition as they will not come back to the site till the next competition as they've lost interest arising from the unrealistic trading that takes place. The purpose of demo accounts is to encourage people to hone their skills and approaches in as realistic a way as is possible (within the limitations of a demo system). Demo or not, when I was training at a trading firm, one could get sacked for not trading realistically/seriously on the demo platforms they had there.

germantrader
Sep 19 2012 at 20:19
posts 32
@TreeTox

I like Your input. and I agree that there must be more rules beside the maximum lot size. I am not an expert yet, only learning and I like the Demo contest idea.
but how about starting with some ideas for fair contest rules? maybe with each input from the experts we get nearer to the fair rules?

Ethan (Staff)
Sep 20 2012 at 07:53
posts 1400
Guys, we actually tried implementing those restrictions a long time ago, however unfortunately brokers cannot control the max total open lots, only max lot per trade - when it was implemented, traders just opened more trades to compensate for the limit.

TreeTox
Sep 20 2012 at 12:42
posts 7
Is there no way that some kind of sensible constraints - at least rules or metrics that can be put into place where the trading competition is more reflective of skill rather than just silly pot-luck trades that seem to take place, skewing the tables? As far as I understand, MT4 is an extremely flexible system at both user and server ends... it definitely is worth looking into or thinking about further. Perhaps the MT4 guys themselves could advise?

neodix
Sep 20 2012 at 13:40
posts 18
OK, it's not possible to implement this kind of constraint on a technical level, but it can be imprinted into the rules of competition and this is it. The one who violates it - gets disqualified. The thing is, it's not necessarily that the competition will be more interesting (i think it will be), but it definitely will be different from others, why not to give it a try?

DrVodka
Sep 20 2012 at 17:50
posts 297
actually it is very simple to do that , u just need to take Drawdown and Profit Factor: in to considerations , and u half way there .. cheers

i think some brokers do that . but the rules are very confusing u score points as well as money that soft of thing ,rrrrrrrrr

germantrader
Sep 21 2012 at 17:47
posts 32
I found this posting on forexmagnates , does this make sense and will it take off the gamble effect that TreeTox mentioned?

the contests should have an additional factor to normalize the gross rate of return. If you take cues from Varengold Bank’s fx contests, you can see that those who trade aggressively are just as much chance to win as those with conservative strategies because they add an additional factor (standard deviation of the daily account balance change) to create a ‘risk-adjusted ROI’. And it still allows traders to trade however they want. It’s one of the most objective methods I’ve seen to get accurate picture of ROI yet.
https://www.trading-challenge.com/en/index.html

TreeTox
Sep 21 2012 at 18:34
posts 7
germantrader - I think you may have provided a solution to the problem ! I had a look , and it really makes sense to implement something like this for the next competition - for those people who want to do maximum size, they can still carry on doing it; for those wanting to trade more conservatively, then they can do so - but everyone knows that at the end of the day, it is the risk-adjusted rate of return (RARR) that would be used to rank the eventual winners.

There could be two columns - absolute equity return and risk-adjusted return - and both can be used to rank top performers to the worst performers in a table, as it is now. However it would be made clear that the final decision on the competition winners would depend upon the rankings in the RARR; here is Varengold's version of the table which seems so much more informative and actually reflective of the skills of the traders within realistic bounds:

https://www.trading-challenge.com/pdf/Ranking.pdf?1322667081

If they are using this RARR way of assessing competitors and fund the winners with 150,000 USD, it backs up the concerns and frustrations I have. In fact, all the banks, traders, algos, etc. are judged this way. Below, they kindly provide the pretty straightforward metric to implementing the RARR.

https://www.trading-challenge.com/pdf/FAQ_en.pdf

Please, let's make the next competition more interesting by doing it this way - and it will encourage new interest and actually bring to the fore consistently good traders instead of lucky gamblers !

germantrader
Sep 21 2012 at 20:34
posts 32
@TreeTox

glad that I could contribute something here. but is there a simple way to explain this kind of method? I am sure I am not the only one who didnt understand this explanation.

thanks in advance

germantrader
Oct 08 2012 at 12:29
posts 32
I found a posting of the current leader of the contest (from The UK) that he mentioned that this contest is not who will have the most pips earned at the end of the contest but the most profit.

so how about a contest where the most pips earned will win the contest? does this make sense?

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