Contest for REAL accounts Omówić

I totally agree with Syed, demo contests will only encourage the use of VERY unsound trading tactics which will be able to generate short term profitable results. For example, a trader may use a martingale system and get very profitable results for a few months which wouldn't be sustainable in live trading. You are also risking the issue of systems which CANNOT be traded in a live account but are EXTREMELY profitable in demo. For example, one could use off-quote 1 minute channel scalping, which is impossible to do in live testing due to requotes but generates HUGE amounts of money in demo accounts. These are very important issues, specially the last one which IS a very clear reality. Scalping systems ALWAYS overestimate (to a GREAT extent) profits in demo trading due to the fact that slippage, spread widening and requotes do not happen. There should be a minimum average profit per position (at least 5 times the spread eliminates these problems) on the contest rules to avoid these problems.

There are another ton of issues, related with what Syed mentioned. A person could put up a huge risk and multiply a demo account by 5, then stop trading and win the contest. The person could wipe the account 19 out of every 20 times but this person will win a contest eventually by doing this. Imagine if two people decided to cooperate, they could start the demo accounts, take huge risks on opposite directions with one of the two accounts doubling while the other gets wiped. This could lead to an account effectively winning through such a strategy.

I think that a demo contest encourages unsound trading tactics, risky trading and unrealistic expectations. Very strict rules like a minimum average profit and a minimum number of trades are required to prevent the most cheaty approaches but trading styles like Martingales, grid trading, etc (which are very unsound) will still be encouraged and rewarded, also giving people the dangerous impression that these trading styles can be long term profitable.

Just my grain of sand :o) Real 1000 USD account contests would be MUCH better ! Thank you for listening and for the great service you give to all of us ! :o)