Trading contest: only 5.2% were profitable

C

clambill

http://www.fxclub.com/contest-list/?page=0

LOL, there's something about that that makes me laugh. Do you think it's because most contest participants were putting too much at risk on every trade to win?

I'm inclined to think the first 50 contestants maybe used short time frames and small profit targets to achieve those results.

Anyway, this was only my 2nd participation in a free trading contest. The first one was in March, 2009 and I quit after several days of losses. This time, I was profitable which was my only goal. So, this was a win for me. Haha. Anyway, 816 participants out of 15 556 were profitable.
 
Well, this is exactly what we expect out of the real world, right? ~95% of traders lose money.

Excellent job winding up in the black. How do you do with real money on the line? What's your strategy?
 
If these numbers are real that's bad press for Forex Club.
I would take down that contest ASAP before the participants notice they don't stand a chance in FX. I didn't think the success rate was so low.
 
Quote from SomeYoungGuy:

Well, this is exactly what we expect out of the real world, right? ~95% of traders lose money.

Excellent job winding up in the black. How do you do with real money on the line? What's your strategy?
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Actually, I think I heard in one of Oliver Velez' videos that the first 85% quit in the first six months then half of the rest quit in the following 6 months. So, I'm thinking that might be 7 and a half percent?

Thank you for congratulating me, my favorite book among the 37 books I read on trading is: "Forex Patterns and Probabilities" by Ed Ponsi. Although, the best way I've learned is by testing methods with real time prices. I would modify some of Ed Ponsi' ideas but they're pretty good. His book I believe is a solid starting point.

In reality, I'm still testing the method I took 18 months to develop. But this past week I learned a few things that settled some questions for me. I have the impression that the last few adjustments I have made to my method this week will mean I might be profitable in the following weeks. I'm hesitant to reveal my strategy now. If I make enough to be comfortable, maybe I'll share it with people here later.

Quote from Kicking:

If these numbers are real that's bad press for Forex Club.
I would take down that contest ASAP before the participants notice they don't stand a chance in FX. I didn't think the success rate was so low.
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Well, you'd have to scroll more than 10 pages to see people who have ended the contest without a profit. And besides, people who are dreaming about making it big in the markets might only want to look at the results of the first guy who made like 20 times his money in one week. The only thing is, results like that would be unrealistic in my opinion in the real world simply because if you put that much risk in every trade, you'd be risking a blowout at any time.

It does inspire me somewhat to develop other methods maybe in several months just to see if I could sort of duplicate those kinds of extreme results (at least in demo accounts).
 
Quote from HighNetWorth:

This guy was the winner of this contest:

http://tradertopgun.blogspot.com/
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DEMO account contest - then one needs to adjust the results downward to remove slippage/spread/commission(implied).

But the worst thing is, that a lot of those top "5.2%" profitable were probably due to blind good luck. Run the contest again, and see how many of those 5.2% wind up on top again...

Longterm (10-30 years) lucrative (like $100K+ annual profits with good trading metrics/stats) traders are most likely < 1%.
 
Quote from TraderZones:

DEMO account contest - then one needs to adjust the results downward to remove slippage/spread/commission(implied).

But the worst thing is, that a lot of those top "5.2%" profitable were probably due to blind good luck. Run the contest again, and see how many of those 5.2% wind up on top again...

Longterm (10-30 years) lucrative (like $100K+ annual profits with good trading metrics/stats) traders are most likely < 1%.
More...

Why are you still on this site then? Let me guess, you're one of the 1%...and for only $250K, TraderZones (ummm wait, rcanfield, umm actually Ross Canfield) will sell you the holy grail system. :eek:
 
Quote from TraderZones:

DEMO account contest - then one needs to adjust the results downward to remove slippage/spread/commission(implied).

But the worst thing is, that a lot of those top "5.2%" profitable were probably due to blind good luck. Run the contest again, and see how many of those 5.2% wind up on top again...

Longterm (10-30 years) lucrative (like $100K+ annual profits with good trading metrics/stats) traders are most likely < 1%.
More...

I thought this kind of criticism would only come out of a non-trader. I can tell you after 18 months of work, I don't believe my results happened randomly.

Actually, if I had enough money to be comfortable right now, I'd LOVE to talk about my ideas. The reason is, not only does David Nassar say that some people misinterpret technical indicators, but my "research", if you will, has shown me that the traditional ways of using technical indicators can lower your probabilities. And this is apart from the fact that beginners are also capable of taking a perfectly legitimate, realistic trading strategy and screw it up because of their emotions. You can also have differences in backtesting and forwardtesting.

I also think one of the only reasons some people don't make it huge is because they'll settle for a certain amount then start trading cautious. At least, that's what one trader interviewed by Jack Schwager seems to have implied when he said: "There are bold traders and old traders. But there are very few bold and old traders."
 
Quote from clambill:

I can tell you after 18 months of work, I don't believe my results happened randomly.
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the only way to prove this, is to repeat it in the next contest. Very rarely, do people repeat, largely due to the fact contest winners are lucky

One example is the Robbins World Cup trading contest. See how many of the top 10 continue there from year to year.

Beliefs are nice, but they disappear under the harsh light of tracked returns, be that contest or an auditing site. Evidence

And many of these that do win a contest, have bad trading metrics (drawdowns, sharpe/sortino, profit factor/expectancy, etc.

"Winners" does not mean a whole lot if one does not see the entire journey that got them there.
 
TraderZones, do you follow contests? Now that I have more active trading experience, I'd like to follow contests to see what happens. If anyone knows of more contests, please post the names/websites here.

I agree with you that the sort of parameters that some traders might use to win a contest would be unrealistic long term. I spoke with a former day trader who failed who told me he did some backtesting where he could be right 95% of the time. When he said it was using large stops, I lost interest immediately. This is because, let's say you find a method that works over hundreds of trades but can produce up to 10 consecutive losses at a time once in a while. Well, 10 consecutive losses times very large losses would wipe you out.
Ed Ponsi ran a test in a demo account that he showed in his book: "Forex Patterns and Probabilities". It showed the results of what would happen if you used small profit targets with no stops. The result? A long list of winners then a blowout. So, a contest winner could possibly use small profit targets and huge stops but this would be unrealistic with real money in the longer term.

I can say however that my positive result in the trading contest was done with small losses and much bigger winners. :)

I still remember hearing that guy (who told me he could be right 95% of the time with backtesting) yelling at his screen when we were both working in a proprietary trading firm. I suspected he was using a momentum oscilator because it sounded like he was being crushed by trends. As it turns out, he told me his backtesting was done using the RSI.
 
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