I attended a short session on trading conducted by Ray Barros last week.
There was supposed to be some live trading demonstration involved but I only knew we were the ones who were supposed to do it when I arrived. But the bonus for us was that the person who managed to make the most money using a dummy account at the end of the session would walk away with a new iPad.
Given that there were less than twenty people in the room, I thought that the chances of winning the prize were pretty decent.
We were given half an hour to make all our trades and we can select the kind of instruments that we wanted to trade. The person with the most money at the end of it would be the winner. Each person was given US$10,000 in a dummy account.
I spent the first ten minutes setting up my dummy account and getting used to the trading platform. By the time I was ready to start trading, there was only fifteen minutes left to do whatever trades I wanted to make.
Ideally, I should be looking at a few charts, waiting for a signal to enter a trade, and then pull the trigger.
However, this strategy was not possible in such a short time frame. So, I settled on looking at the EURUSD chart. Tried looking at the 1-minute, 3-minute and 5-minute time chart to figure out the trend, but there was just too much noise.
To trade a 1-min chart, a scalping strategy was possibly the best option but I was not ready to do that using a platform that I was not familiar with.
To win the competition, you need to be correct as well as win the most money. There isn’t time to make too many trades, and it was all really about making the most of a 50-50 situation as you can only long or short, and hope for the best.
And you have to trade a big position size in order to stand a chance of winning. Doing so in normal circumstances will guarantee a wipeout of the account sooner or later.
So I built my position from $10,000 all the way to $100,000.
As it turned out, only 4 traders in the room turned in a position performance. This is surprising if you consider that the results of one particular trade would probably be about 50-50.
I was one of the four but didn’t do enough to win the iPad. In hindsight, I should have taken on a position of $300,000, as that was the amount that the margin can reasonably support without being closed out. There are no prizes for being right but finishing second.
The biggest loser of the day also got a prize, a free ticket to the seminar that Ray was conducting. He was duly rewarded for taking on the correct position size in a trading competition.
The easiest way to win such a short competition would be to team up with another person and open opposing positions with the highest margin that you take on. One of you will be the winner, and you can then split the prize. But that would take away the fun from the competition wouldn’t it? 🙂