Friday, May 11, 2012

Tricks some traders use to win Trading Competitions

Have you ever wonder how some traders win trading competitions; with staggering returns; sometimes in excess of 1000% in one single month.

the following is a simple technique. Variations of it does exists.

open two accounts; and run two strategies that are reverse of each other. i.e.:

strategy 1:
- buy 10 units of EURUSD

strategy 2:
- sell 10 units of EURUSD

hold all trades until end of contest; then liquidate.

one strategy will be losing; and the other winning. Of course there is a *small* chance that both strategies will breakeven; but it is low probability.

Strategy 1:

Strategy 2:

Majority of forex brokers encourage competitions using micro accounts; as low as $500. Losing $500 in one account; to win a prize of $20,000 in the other account; is not such a bad idea after all.

Moreover; entering trading contests with paper money; is free money for cheaters. losing $$$ on paper money in one account; to win a price worth $50 ~ $500 is not bad.

i did a backtest of the above strategies in April 2012; strategy 1 lost 15%; and strategy 2 made 15%.

notice how the max profitable percentage of strategy2 was about 40%; at the beginning of April.

you could just liquidate your positions and stop trading at that time. and you are done for the month.

If you observe some winners in trade2win contests; you will see this behavior. users stop trading suddenly after the equity curve reached a high mark. and also; you will see that they only traded a position or two.

If you have any other technique; please share it.

Disclaimer: the purpose of this thread is to expose the cheating techniques; so you dont get duped into beleiving real life trading behave in the same way. Following this techinque may not improve your trading career; despite you may end up winning prizes. many retail forex brokers have weekly and monthly competitions; with prizes reaching as high as $50K. now that you know about this secret; go for your life; and start a career of collecting prizes from trading contests.

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