Forex and Crypto Trading Contest: How It Works on Pocket Option

What Is a Forex Trading Contest

A forex trading contest is a competition which is held for a limited period of time. All participants trade under similar conditions, and they are ranked according to a stated measure. The top finishers receive prizes for the best result.

There are three aspects which distinguish any competition: the dates of beginning and completion, the ranking metric used, and the prizes. A trading contest forex brokers run can last from a couple of hours to several weeks, and that duration changes how participants behave more than you might expect.

Most forex contests resemble each other regardless of whether they involve currency pairs, cryptocurrencies, or both. The instruments involved don't play as much of a role as the rules, and whether an event is called a forex trading competition, a tournament, or a challenge doesn't affect anything.

Demo vs Live Trading Contests: What's the Difference

The distinction between these two types of contests is important because it determines the risks involved.

• A forex trading demo contest uses virtual funds. You cannot lose your own money in such a contest, and the prizes may include cash, bonus credit, or other rewards.

• A live contest involves your actual balance. Any losses are real, even if you fail to place on the leaderboard.

This is the aspect to think about before registering for either. In a demo event there is no risk of real losses, so the optimal strategy to place high is to maximize risk. That is not a weakness in your logic, it is what the incentive structure rewards. The problem is that those habits do not stay inside the contest, and the same approach applied to a funded account ends it.

If you haven't traded on this platform before, it is better to familiarize yourself with the basics first. This guide will help you learn how to place a trade on Pocket Option.

How a Trading Contest Works: Entry, Ranking and Prizes

There are three key stages in any contest. The middle one defines everything.

1. Entry. There is a registration period which can close before the contest itself. Some events require payment, and some are free to enter.

2. Ranking. The participants are ranked on a leaderboard according to a stated metric. This metric is the most important line in the rules, as it defines what the contest requires from you.

3. Prizes. They are awarded to the top participants in the form defined in the rules. The prizes can be cash, bonus credit, or other non-cash rewards.

The ranking metric deserves your attention because the kind of contest forex trading platforms host can encourage quite different behavior from their contestants. Percentage return favors those who trade aggressively. Absolute profit favors larger balances. The number of winning trades favors volume over quality. Risk-adjusted measures favor consistency.

Find out the metric first and understand what you are supposed to do, and only after this make the decision whether you are ready to act accordingly.

What to Check in Contest Rules Before You Join

Most complaints about trading competitions are caused by information which was in the rules of the contest all along. Read this list before joining any forex contest.

• The ranking metric. Is it percentage gain, absolute profit, trade count, or something else? This is the most important thing.

• Prize type and its withdrawal terms. Cash, bonus credit and non-cash rewards each behave differently. If the prize is credit, check whether a turnover or wagering requirement applies before it can be withdrawn.

• Entry fee and whether it is refundable in case of cancellation of the event or your withdrawal.

• Eligibility. Verify whether there are restrictions regarding your country, your account type and your account verification status.

• Dates. Deadline for registration, start time, end time, and when the results become final. Pay attention to the time zones.

• Minimum amount of activity. Some events require a minimum number of trades to be completed to receive a prize.

• Tie-breaks and disqualification. How ties between participants are settled, and what conduct can disqualify you.

It is not particularly fun to analyze all these details, but it is cheaper than arguments later on.

Types of Trading Contests

Contests aren't divided into fixed categories. They are distinguished by several features, and the combinations you will meet are built from these.

• Free to enter or paid. Free events attract more participants and decrease your chances to place, but they cost you nothing to try.

• Demo or live. Using virtual funds or real money, as discussed above.

• Short or long. A few hours reward risk and luck. Several weeks give consistency more room, although not as much as you would expect.

• Fixed or personal starting balance. A fixed starting balance makes percentage ranking fairer for all competitors.

• Open or qualifying. Some events are open for all eligible contestants, while others require participation in a previous round.

The combination of these features changes on Pocket Option, so it is better to visit the tournaments section on the platform rather than look for a list in an article.

How to Join a Pocket Option Tournament Step by Step

The steps are very simple. The part missing in many cases is the reading of the rules.

1. Log in to your account. You need an existing account to enter any contest.

2. Visit the tournaments section and see what events are available right now or will start soon.

3. Pick one event and read its rules. Pay attention to the ranking metric, prizes, any entry fee, eligibility criteria, and the dates of the event.

4. Register for the event during its registration period.

5. Place trades only during the period of the contest. Trades placed outside this period will not count towards your ranking.

6. Watch the leaderboard as it updates, and check when the results become official.

Treat the third step as the actual work. Everything that determines whether entering was a good idea is on that rules page.

How Ranking Works in Pocket Option Tournaments

The leaderboard is updated during the course of the contest, and your position is calculated based on the metric defined in the contest rules. Since the ranking metric varies from contest to contest, the only reliable answer for any particular event is on the rules page of that event itself.

There are two things which are true about the ranking in any contest. Your position is relative, so it changes when other participants place trades, even if you do nothing. And the leaderboard you are watching during the contest is not a result, since the ranking which matters is the one at the closing time.

Before entering any forex contest, make sure that you know the current metric, the prizes, and the entry conditions for that event. These details change between events, and an outdated summary is worse than nothing at all.

How to Improve Your Ranking Without Reckless Risk

There is a way to compete without betting your way up the ladder. It will not win every event, and that is the trade-off.

1. Find out what the metric favors, and then develop your approach prior to the contest rather than during it.

2. Decide your position size and keep it stable. Increasing it to chase the leader is the most common way participants finish worse than they started.

3. Accept that you cannot control the field. Some contestants will take extremely high risks, and the result tells you nothing about either of you.

4. Trade the setups you would trade anyway. A contest is not the place to try a new approach.

5. Decide in advance what you will do if you fall far behind, because the honest answer is usually nothing.

The reason it is important to trade with your usual position size is that behaviors transfer, but leaderboards do not. Putting that into something written down is covered in this guide to building a realistic trading plan.

Why Contest Results Don't Predict Live Trading

A good result is always pleasant, but it is a poor indicator of how you will perform using your real money. That is not related to your skills, but to the nature of the contest itself.

• Small sample size. Several days or weeks of trades cannot show the difference between skill and variance, and no short window can.

• Someone always wins. In a large group of participants, the top position is simply the extreme value of the distribution. In any large enough contest, the winning result can be reached by luck alone.

• Different incentives. Winning requires high variance, while surviving with real money requires its opposite. The behavior which allows you to rank well closely resembles the one which gets you out of the game in live trading.

• No capital constraints in a demo event. Losing all your balance costs nothing, so the discipline that matters most in live trading is the one a demo contest cannot test.

That is not a warning against entering, but against drawing conclusions about your live trading from a contest placement. If you wonder what position size you should use with real money, that is a question of sizing rather than competition, and the arithmetic is covered in this piece about the Kelly criterion and position sizing.

Practicing on a Demo Account Before You Compete

Using a demo account outside a contest is much more helpful than doing the same within one, because nothing pushes you to take risks you normally wouldn't take.

1. Learn the interface until placing a trade becomes automatic. Fumbling the mechanics under time pressure is an avoidable way to lose.

2. Choose the position size as a percentage and practice sticking to it, even on the days when you are behind.

3. Trade several weeks without a leaderboard, to find out what your approach does when nobody is winning or losing against you.

4. After this, enter a contest if you wish to, using the position size you have proved you can follow.

Worth saying once again: results on a demo account do not indicate future results in live trading, and that applies to a forex demo trading contest just as much as to ordinary practice. What you get from practice is familiarity, not a prediction.

Conclusion

Read the rules before checking out the prizes. The ranking metric shows what the contest requires from you, and the withdrawal terms tell you how valuable the prize actually is.

Apart from that, keep the two activities separate in your head. A contest is a time-limited competition against others with a deadline. Trading your own money is an open-ended exercise in avoiding losses. The former can be enjoyable and occasionally profitable, but it is not a test of the latter. Losses are a part of both, and the sizing you would defend on any regular Tuesday is the sizing to use in a tournament too.

Disclaimer: This article is informational and educational and should not be construed as trading advice or an encouragement to enter any contest or tournament. The format of the contest, ranking metric, entry conditions, prize structure, withdrawal terms and eligibility rules are set by the organizer, vary from contest to contest, and can change, so make sure that you have read the rules of the specific event before entering it. Nothing here guarantees any prize or result. Trading involves a significant risk of capital loss and may not be suitable for all investors, and results achieved in a contest or on a demo account do not indicate future results in live trading.