Traderace Launches a Profitable New Trading Competition
It frequently seems as if regulators globally are doing their best to discourage people from
trading FX, amidst claims that the process is unfair. Whether that stems from a perception that
the whole process is weighted too much in favor of brokers, there’s a lack of transparency, or
concerns that clients being left exposed to significant potential losses, leveraged trading is
struggling to shrug off a rather grubby reputation.
So, amidst the recurring claims of fast execution, great customer service and tight spreads, it’s
encouraging to see some entities coming to market with a rather more innovative concept,
developed to find a new way of engaging both existing and potential traders alike.
Hong Kong based Traderace seems to be doing just this with its newly launched trading
competition. It’s been structured to make it simple to understand, runs on a pure STP model
and leaves the traders not only working on building their own P&L as would be the case with
any broker, but also competing for prizes which are funded from the broker commissions
generated. The concept is understood to be a world first and if the company can achieve its
target of 200,000 participants, the prize fund is forecast to be in the region of EUR1,500,000
Participants will be limited to funding a maximum of five accounts per month, with a maximum
deposit of EUR100 per account. That’s been designed deliberately to provide a level playing
field across the board, so that heavyweight participants aren’t immediately put at an unfair
advantage of winning either the monthly or annual competitions. Accounts can’t be funded
more than once in a month in a move to encourage responsible trading, although the option to
have multiple accounts allows several trading strategies to be run in parallel.
These will be looking for both the absolute return and also the greatest volume generated in a
month. Leverage terms and pricing will be set at industry standard levels, with popular
currencies offered at 400 times margin and industry standard spreads, with the prize money
funded purely from 70% of the trading commissions generated. This creates a fair and
transparent competition that should be both fun – and for some has the potential to see them
gain life changing sums of money.
As Antonis Nicholas explains, “We decided to structure this competition in a way that
deliberately gives us as the counterparty no incentive to trade against clients. The full STP
model means we’re agnostic to each trade, meaning competitors are left to trade against the
market and one another. There’s negative balance protection in place and we like to think of
this concept as meeting both the needs of professional and recreational traders alike.”
Traderace is working with the recently established 4XCube brokerage to deliver the necessary
competition to the widest possible audience, with the opportunity to trade on a range of
instruments including currencies and indices. IBs will also be incentivised to encourage their
clients to participate in the initiative.
In a world that at times seems to be sorely lacking innovation, this illustrates that other
options do exist. The cooperative nature of the prize fund also provides valuable transparency.
Assuming Traderace can gain the necessary scale, as the company says the prize payouts –
which are in addition to an individual’s trading profits – could prove significant.
By M Sunder