Today we discuss how to develop a strategy to win in trading competitions. Because strategy is the most crucial part of winning any trading. This is necessary to prove trading skills and boost confidence to pass any prop firm challenges. After getting a funded account, most traders felt pressure, and most of the time their accounts were wiped out because they don’t have the right approach. In this article, we understand how to make these strategies and become successful traders.

What is a trading Strategy?

A trading strategy is a systematic and predefined plan that shows traders when to exit and enter trades. The main purpose of making strategy is to help the traders make consistent, well-informed decisions, manage their risks, and hit the profit target. By making the strategy, traders can analyze the market movements. 
Also, traders have to pay attention to scoring metrics. For example, some competitions give prizes to the trader who makes the most total profit, while others base traders on percentage returns or risk-management performance.

Choose the Right Trading Style

Once you understand the trading strategy and its importance, take the next step to choose the right trading style according to your needs. Always keep in mind that there is no such thing as one trading fits all. If your competition is short-term, traders can lean towards scalping or day trading, which are both aggressive and fast-paced techniques to get small profits very quickly. During the longer period, there is the possibility of applying a swing trading strategy, which is more giving you time to follow market trends for a few days or over a week. 
Avoid position trading if the competition stretches over several weeks or months. Remember, in a trading competition, consistency is important, but at the same time, the ability to take courageous and timely decisions is essential.

Select the Right Trading Strategy

The most common strategy for analysing Technical and Fundamental. In addition to these, there are some other popular ones, like sentiment analysis, high-frequency trading, and arbitrage trading. Fundamental analysis is often a reliable method to forecast the long-term price trajectory. However, it does not always provide very clear and good trading entry opportunities. On the other hand, technical analysis is excellent in increasing your profit sharing since you are aware of when and where the market is likely to move, although it may have a higher number of false signals. Fundamental trading strategies predict, for example, that a currency pair's price will increase over time because of the interest rate differential between the currencies. Although this is not specific about when and where to place a trade. Technical trading strategies can indicate that the trend has changed from bearish to bullish at a certain price point, and you can expect that the price will then continue to rise.

Build a High-Risk, High-Reward Strategy

Let’s be straightforward—trading competitions are not about safe, slow profits; traders are about needing to shine. Making safe and conservative trading strategies will not lead you to the top. That said, there’s a fine line between calculated risk and recklessness. During the competition, traders have to prepare to take more risks than they usually do in a real-life trade. Many of the competitors who win are found to be risking around 5-10% of their capital each trade, which is quite overrated compared to the standard 1-2%. It is reasonable to do this at that point because the aim is to outperform others for a short time instead of protecting long-term capital. And then traders’ll also need to address high-volatility assets. Movement in the price is a trader’s friend. No doubt, volatile ratios may appear to be risky; however, this is the best opportunity to get higher profits in a short time. Other than just using leverage, traders can try leverage, but very carefully. Over-leverage can cause you to blow away your money in just a few minutes.

Make strong Risk Management.

Even in a trading competition where aggressive strategies dominate, risk management plays a crucial role that is non-negotiable. The traders who are the most successful in a single trade are the ones who know when to take a step back.

 For each trade, traders have to set a clear stop-loss order. To avoid losing the whole capital in one day, set a maximum daily loss limit so that one bad day doesn’t knock you out of the competition. Don’t lose all your currencies into one market—in forex, you can trade in other pairs or even in crypto coin or stock.

Control Your Emotions

For every competition, the most underrated trait is emotional discipline. The pressure is immense. Traders want to do overtrading, chase losses, or change their strategy during the competition. Never do that. Emotions will make an effort to thicken you—do not fall victim to them. In no case should, try to take revenge on them after you cause them a loss. Do not let a series of wins make you so confident that you become lazy. Stick to your plan and stay cool and collected. In trading, it seems that it is the most steadfast who gain the upper hand in the long term.

Monitor the Leaderboard (But Don’t Obsess)

Many trading competitions feature live leaderboards to keep the enthusiasm alive. It is very crucial to be aware of the rankings, but it’s equally important not to let them rule over you emotionally. The leaderboard is a handy tool for you to see the precise level of aggressiveness of the traders who have made it to the top and how many steps you need to move up the ladder. On the other side of the coin, do not go into such traps as revenge trading or overly risky moves to catch up. The leaderboard may play with your emotions, making you feel a combination of greed, fear, and impulsivity. Don’t let it throw off your game plan.

Conclusion

Winning a trading competition is not all about technical skills — you also need to have a good strategy, a stable mind, and a well-planned but daring approach. Traders first go by the rules, select the proper trading technique, and take a fearless yet calculated approach, never forgetting risk management. Watch it; don’t distract the leaderboard for the scores. Keep up your performance through market analysis and make sure that you control yourself in the heat of trades. After all, the fastest trader does not win, but the smartest trader does.