I want to explain a simple method for a trading contest that could work. What do I mean by ‘work’?
Ok trading contests choose winners that have accumulated the most profits in a certain amount of time.
This is stupid. I could open about 40 demo accounts and place pending orders all over the place and there is a good chance one of them will make millions. In fact I opened up an account for that CNBC contest a couple of years ago and I was in the top 20 for a good while by just placing order with maximum margin and letting it run.
WHAT A CROCK OF BOLOGNA!
Here is my plan for a trading contest. If broker REALLY wants to find out who the best traders are out there, they can run a competition with the rules below.
1. The contest lasts one year.
2. Trade live accounts. They could even be micro accounts. It doesn’t matter because the formula to create a winner will work according to to starting balance of the account.
3. Take the account with the highest equity growth and lowest draw down in comparison with the equity. This is your winner.
I have seen some contests where a person makes something like a 300,000% return in a month. Yea ok whatever. In real life it may be possible but guess whats going to happen next month? That trader will margin call.
I wish a company would offer a trading contest for real traders to prove their skills over the long run. This would be awesome and there would be so much appeal, it would have its own reality show! HA!
Hey it could happen…