How to Start Forex Trading with No Money: Demo Contests

For a lot of Forex hopefuls, the biggest challenge to becoming a successful trader isn’t money management, trading psychology, or even coming up with a profitable system. It’s a lack of bankroll.

You can get started with many forex brokers these day with a very small account. We’re talking about $100 or less.

That’s great, because it lowers one of the entry barriers. But it doesn’t remove the reality that building up from zero or close to it is very slow-going. And many traders really are starting out with literally zero. They may not even have enough to open a real account.

It may seem impossible to start trading forex with no money or little money, but there are some creative workarounds.

In this series, we are going to teach you how to start trading forex without a significant bankroll. To kick things off, let’s dive into an exciting opportunity offered by some forex brokers: demo contests.

What are Forex Demo Contests?

A forex demo contest is a competition you can join after signing up for an account with a forex broker. During the contest period, you trade with virtual funds in a demo account, competing against other traders. If you win, you may receive a real money reward.

How a Forex Demo Contest Works

There is some variation in how demo contests can work, but let’s give you an example so you can see how one might play out.

You register an account at a forex broker’s website.
You sign up for the demo contest.
You read the rules for the demo contest carefully.
When the contest period starts, begin trading in your demo account. It will be loaded up with virtual funds at the start of the competition. These are what you will trade with. Ensure that all of your trades fit within the rules of the contest so that your profits count.
You can check the leaderboard (if one exists) to see how you are ranking against other competitors. Continue trading.
At the end of the demo contest period, the winners will be determined. How many winners there will be depends on the rules for the contest.

Often, there will be a prize pool that is distributed among the top contestants. It is up to the broker whether to give it all to the top winner, or distribute it among the top 3, 5, 10, 20, or so on. It is common for the prize pool to be divided among quite a few contestants. So, entering a demo contest gives you a good shot at winning something if you know what you are doing.

Note that most forex demo contests feature individual traders facing off. But some feature teams competing.

What Form Does the Prize Take?

Forex demo contest prizes may take any of the following forms:

• Bonus funds: Often, the prize for winning a forex demo contest is bonus funds. These will be deposited directly into your live trading account. You can then use them to start placing real trades for real money. Take note that there may be specific rules governing bonuses. You will need to look those up to learn if there are any restrictions on the use of your bonus funds or your ability to withdraw them.

• Cash: Some forex brokers may award the winners of demo contests with actual cash prizes. These will also be deposited to your account. But you will be able to use and withdraw them anytime you want with no extra limitations. They will be just like cash you deposited yourself.

• Other rewards: Forex brokers may also sometimes opt to give out other types of prizes, i.e. gift certificates, technology, etc.

Any of these types of prizes can help you start trading in a live account. Cash or bonus funds are most direct, of course. But if you have to, you can sell other types of prizes, and then use the cash to fund your account.

Best Practices for Forex Demo Contests

Demo contests are easy to enter. But they are not always easy to win. You may be up against other talented (and sometimes lucky) traders. How can you give yourself the best shot at winning?

• Follow the rules: Make sure you are following the contest rules. You don’t want to make a bunch of trades that don’t count, thinking you are ahead when you are actually losing.

• Know the schedule: Know exactly when the contest starts and ends, so you can jump in right away and start participating, wasting no time.

• Know the goal: What determines the winner? Is it the most trades won? The highest ending balance?

• Use a suitable strategy: Pick a strategy you know can deliver. But make sure that 1-you can execute it successfully, and 2-that it is a fit for the rules of the contest.

• Follow your rules: Do not make arbitrary decisions during the trading contest. Follow your strategy rules exactly as you would if you were trading on a live account with real money.

• Use good money management: No matter how good your system is, it will fail if you do not apply good money management techniques. Calculate around 2% of your total virtual funds, and stick with that as you trade, just as you would in real life. You may be tempted to gamble for a big win, but it can just as easily result in a heavy loss.

• Keep your cool: Even though you are just trading with virtual funds, the stakes can feel high when you are participating in a contest. We recommend you ignore the leaderboard. Just stay focused on what you are doing, and try to keep your emotions regulated.