Unlike traditional trading, winning a contest requires a different mindset altogether. The ranking system, prize pool, and time constraints dictate a whole new definition of “winning.” Let us now discuss an effective strategy that will ensure success in every crypto trading competition which is based on the actual format of BuyCrypt (which has organized 48 tournaments, has around 54 tournaments each week, and has distributed around $384,000 among 127 funded accounts), and uses virtual margins to make money through trading.
First and foremost, it is necessary to understand the score model in order to maximize the possibility of success.
Using a generalized strategy for competition trading with specific ratings is the most common mistake made by traders. Thus, the first thing you should do before starting to invest is to familiarize yourself with the leaderboard rules since the scoring system matters greatly in terms of success.
The strategy for trading competitions with absolute PnL would favor trading with high dollar amounts and in terms of size of the account. For instance, the rating in the case of using ROI would be a more equalized situation because it would allow small disciplined accounts to outperform large randomized ones. Consequently, using PMC along with PnL and ROI could also impact positively on the scores based on the fact that it would evaluate how your positions behave during the tournament.
The number of prizes influences your trading behavior. That is why you should ask yourself several questions before starting: what place you need to achieve to win money? If the competition pays the top places, it would be more difficult to gain prizes by the way of keeping consistency and providing money management because sometimes being the first could be fatal.
A lot of tournaments held by BuyCrypt give a good opportunity to test your strategy without any investment.
The length of the tournament defines its nature. Winning strategy for short tournaments (sessions lasting from several hours to a single session) does not include lots of trades for demonstrating one’s edge and, therefore, makes such tournaments very random.
In the case of long tournaments, having consistency becomes the winning strategy because winning makes sense. A good approach implies managing drawdown and keeping the risk level low by making a significant number of trades during such tournaments.
Spot and futures trading
Spot trading limits risk to your size of the position and depends on timing and direction. It suits ROI model because it rewards consistency. Futures provide leverage, which means that using leverage could be a good decision in short contests with big payouts.
It is important to note that people make mistakes and confuse the edge with leverage. Leverage amplifies any process whether it is positive or negative depending on the process of creating profits. Therefore, it is necessary to determine whether leverage should be used or not based on the specific format of the tournament.
When does aggression help and when does it destroy you?
Aggression should be perceived as a tool rather than a trait of character. It works when all three conditions are satisfied. First of all, there should be concentrated payout structure; secondly, the time should be limited; thirdly, you should be somehow losing.
Aggression does not work when:
-payout structure is broad
-the tournament lasts long enough for consistency to win
-you are already prize winning and want to risk losing it.
Building a repeatable competition trading strategy
Create a check-list based on the information above before going into trading competitions. Make sure to review the score model, prize structure, type of tournament and level of risk allowed to maximize your chances of winning. A lot of tournaments held by BuyCrypt give a good opportunity to test your strategy without any investment.
Refine your approach based on your own results rather than the noise of the leaderboard. Remember that this is a skill-based simulation on virtual balances with real USDT prizes, and no returns are guaranteed.
Does score model affect my strategy?
Yes, it changes your strategy greatly. The same trade may be right according to one metric and wrong according to another one.
It is rare for this to be true. The leader's position reflects a set of risk exposures that corresponds with their environment—risk tolerance plus strategic advantage—with the implication that by then it may already be too late to act. Since imitation generally implies arrivals at the same point as he does, you will also assume the risk associated with having copied him while lacking his rationale. Develop plans that use a suitable allocation, using acquired skills.
What is the ideal number of trades in tournaments?
There isn't a strict number; the number depends upon the number of events and their durations. In short events, having fewer high-conviction trades is helpful; however, if you have lengthier contests, it is advisable to engage yourself in multiple transactions with lower likelihoods of losing.
Focus on ensuring high quality flawlessly-managed trades instead of being concerned on figures. Always determine the maximum quantity of positions prior the beginning of your tournament.
What will work better: spot or futures?
It has to do with the contest's prize system and rules of scoring. In a tournament that pays prizes from funds obtained from sales, since risk is restricted. Trading in futures implies the potential for greater returns but can also result in losing your complete bankroll if something unexpected happens.
Yes, you can practice before risking any money.
