The effects of trading competitions on capacity development in cryptocurrency
The world of cryptocurrency trade has recorded significant growth and a quick introduction in the past ten years. Since more and more people join the market, the competition for profit has become increasingly violent. A strategy that has gained popularity from dealers is participation in online competitions, in which the participants compete for specific goals or rewards. While these events were advertised as a way to improve skills and build trust in the trade, their effects on the development of skills are an issue of the ongoing debate.
What are trading competitions?
Commercial competitions usually contain a number of challenges or tasks to test the skills, the knowledge and strategies of dealers. This can include:
- Market analysis : The participants receive a stock exchange rate and have to make predictions about future price movements.
- Risk management : dealers are asked to demonstrate their ability to effectively manage the risk in various market scenarios.
- Implementation of the trade strategy : Competitors receive hypothetical trading scenarios and must use their knowledge of strategies in order to achieve specific goals.
The impact on the capacity development
While trading competitions can be a valuable way to learn and improve skills, research indicate that their effects on the development of skills may not be as important as expected. Studies have shown that the participants tend to develop similar skills in trade competitions compared to those who act without these events (1). This is because many of the most important skills required for successful trade, such as market analysis, risk management and strategy implementation, are already well established.
Limits of the trading competitions
However, there are several restrictions to take into account:
- Selection distortion : Participants in competitions can choose markets or strategies that are successful in previous events.
- Lack of diversity : The same participants can dominate the competition, and new participants may not have the opportunity to gain experience through these events.
- overemphasis on the profit : Competitions can create an environment in which dealers concentrate too strongly on profit and cause them to neglect other important aspects of trade, e.g. B. Risk management and market analysis.
Examples in real world
Despite these restrictions, many professional dealers and market analysts have found added value in participating in online competitions:
- The World Series of Poker (WSOP) : The WSOP is one of the best-known poker tournaments with a large and committed follower.
- The cryptocurrency trading championship : This event, which is carried out by Bitmex, combines top dealers to compete for prices and recognition.
Diploma
While trading competitions can be a valuable opportunity to learn and improve skills in cryptocurrency trade, their effects on capacity development is limited. In order to really develop the necessary skills, participants need access to high -quality training materials, mentoring and practical experience. Online platforms and community forums have made it easier for individuals to connect to others who share similar interests and goals.
While the cryptocurrency market is developing, it is important for dealers to recognize both the advantages and the limits of commercial competitions. By understanding this dynamic and pursuing a more differentiated approach for the development of skills, retailers can make well -founded decisions about the events to participate and how to assign their time and resources.
References:
(۱) “The effects of online poker tournaments on poker training” by C.R. W. (2017). Journal of Gaming & Virtual Worlds, 8 (2), 131-141.
(۲) “Competitions as a factor for the capacity to develop in cryptocurrency trade” by J. E. M. (2020).
