Prohibited Trading Practices Full Guide

To maintain a fair, stable, and transparent trading environment, the following trading strategies and behaviors are strictly forbidden:

Definition: The use of Expert Advisors (EAs), bots, or algorithmic systems — combined with high-speed execution — to open and close a large number of trades within very short timeframes, often fractions of a second, in order to exploit micro price movements or timing gaps rather than genuine market direction.

Why it's prohibited: HFT depends on infrastructure speed and technical exploitation rather than market judgment. It can create unfair advantages between traders, distort pricing, and introduce instability into how the firm manages risk across accounts. Because it operates on machine timescales, it's also difficult to distinguish from deliberate exploitation of feed or execution delays.

Includes — Latency Arbitrage: A specific HFT technique that exploits the gap between when your trade executes and when the market data feed actually updates. If a price feed is a few hundred milliseconds behind the "real" market, an HFT system can place trades that are effectively risk-free during that lag window.

How it typically shows up:

• Dozens or hundreds of trades per session, each held for well under a second
• EAs explicitly coded to react to feed/quote timing rather than price trend or technical setup
• Consistent, small, repeatable profits that don't correlate with any visible market movement

Examples:

1. An EA is configured to submit and close trades the instant a discrepancy appears between the platform's quote and a faster third-party feed, generating dozens of near-instant, low-risk trades per hour.
2. A trader runs a bot that scans multiple correlated pairs (e.g., EUR/USD and EUR/GBP) for millisecond-level lag between them and fires opposing trades to capture the gap before it closes.
3. A script is set to auto-buy the instant a price tick updates, then auto-sell within 200 milliseconds, repeated continuously throughout the trading session.

Edge case: A manually-placed trade that happens to close within a few seconds because news moved the market violently is not automatically HFT — the distinction is a systematic, programmatic strategy built around exploiting speed and timing, not an isolated fast exit.

Definition: Opening and closing positions — via take-profit, stop-loss, or manual close — within a very short window, typically a few seconds up to around two minutes, aiming to capture minimal price fluctuations rather than a genuine directional thesis.

Why it's prohibited: This strategy relies on noise in the price feed rather than analysis, trend, or strategic reasoning. It is functionally similar to HFT but doesn't necessarily require automation — it can be done manually.

How it typically shows up:

• A pattern of trades closed within 2 minutes or less
• Very small, consistent profit targets (a few pips) repeated across many trades
• No apparent technical or fundamental basis for entries — trades appear to be reactive to short-term price flicker

Examples:

1. 10:00:00 — Buy 1.00 lot EUR/USD. 10:01:35 — Close for a 3-pip profit. Repeated dozens of times per day.
2. A trader sets a fixed 2-pip take-profit and 2-pip stop-loss on every trade on GBP/JPY, entering and exiting within 30–60 seconds each time, all session long.
3. Using a one-minute chart exclusively, a trader opens a position on every minor candle wick and closes as soon as a few pips of profit appear, with no reference to any higher timeframe trend.

Edge case: A trade that happens to close quickly because a stop-loss or take-profit is hit unexpectedly fast (e.g., a spike from unexpected news) is a violation — the issue is a pattern of trading style built around very short holding times and minimal price capture.

Definition: Simultaneously holding opposing positions (buy and sell) on the same instrument — either within a single account, or split across two or more accounts (your own multiple accounts, or accounts coordinated with other individuals) — in order to minimize directional risk or manufacture a risk-free/arbitrage-style outcome.

Why it's prohibited: In a funded account model, one side of a hedged position generates a loss charged to the firm while the other side generates a profit paid to the trader. This produces a guaranteed, risk-free result for the trader at the firm's expense — it isn't market risk-taking at all, and undermines the entire basis of the funded-account relationship. This is also referred to as a form of Arbitrage.

How it typically shows up:

• Opposite-direction trades opened at or near the same time on the same instrument, across two or more accounts
• Multiple accounts under the same name, or coordinated with a friend/associate, consistently trading in opposite directions on the same symbols
• One account showing suspiciously consistent losses that correlate with gains on another account

Examples:

1. A trader opens a Buy on GBP/USD in Account A and, within seconds, opens an equal-sized Sell on GBP/USD in Account B — regardless of which way the market moves, one account is guaranteed to profit.
2. Two traders agree that one will always buy and the other will always sell the same pairs at the same times, then split the combined profits afterward.
3. A trader holds a Buy on USD/JPY and, rather than closing it when their view changes, opens an offsetting Sell of the same size on the same account to "lock in" the position instead of exiting — net market exposure is effectively zero while both positions remain open.

Edge case: Holding positions in different, uncorrelated instruments that happen to move in opposite directions is not hedging under this rule — the prohibition is specifically about opposing positions on the same instrument, structured to eliminate risk.

Definition: Increasing position size after a loss on the same trade idea/direction, in an attempt to recover cumulative losses with a single eventual win.

Why it's prohibited: Martingale-style position sizing only functions with unlimited capital and no drawdown limits. Because funded accounts have fixed loss limits, a losing streak compounded by doubling position size can rapidly and severely violate risk limits. This is treated as high-risk, gambling-adjacent behavior rather than a disciplined trading plan.

How it typically shows up:

• Position size increasing (often doubling) after each consecutive loss on the same underlying idea
• No stop-loss respected on the initial trade — instead, the losing position is "defended" with a larger new one
• A visible pattern where lot sizes grow in a clear multiplicative sequence (e.g., 0.5 → 1.0 → 2.0 → 4.0 lots)

Examples:

1. A trader opens 0.50 lots on USD/JPY expecting a rise. The trade moves against them, so they open 1.00 lot on the same idea, then 2.00 lots, then 4.00 lots, trying to recover the running loss with one favorable move.
2. After a losing Sell on Gold, a trader immediately opens a larger Sell at a worse price on the same premise, planning to repeat this each time the position remains underwater.

Edge case: Adding to a position as part of a predefined, risk-managed scaling plan (e.g., a documented strategy with fixed position sizing, defined total risk, and a hard invalidation point) is different in principle from Martingale — but if the added size increases risk without a hard cap, or is a reaction to loss rather than a pre-set plan, it will likely still be flagged. When in doubt, ask support to review your plan.

Definition: Repeatedly opening additional positions (in the same or varying size) as the market moves further against your original entry, without necessarily increasing size exponentially, hoping the price will eventually reverse in your favor.

Why it's prohibited: DCA is a legitimate approach for long-term investors accumulating an asset over months or years — but on a funded trading account with defined drawdown limits, it substantially raises the risk of a drawdown violation if the market simply doesn't reverse in time. It replaces a defined risk plan and invalidation point with an open-ended hope for reversal.

How it typically shows up:

• Multiple same-direction entries on one instrument as price moves against the original position, at regular intervals or price levels
• No stop-loss on the original position — instead, the average entry price is progressively "improved" by adding more
• Growing total exposure to a single losing idea over the course of a session or several days

Examples:

1. Buy 1.00 lot EUR/USD @ 1.1000. Price falls to 1.0980 → buy another 1.00 lot. Price falls to 1.0960 → buy another 1.00 lot. The trader keeps adding to the same losing view rather than exiting.
2. A trader holds a losing Buy position on Oil overnight and adds a further 0.5 lots each time the price drops another $1, intending to lower their average entry price and exit once price recovers to breakeven.

Edge case: A single, pre-planned re-entry after being stopped out — a fresh, independently-reasoned trade taken after the original was closed — is not DCA. The defining feature of DCA is adding to a position that is still open and losing, rather than exiting and re-evaluating.

Definition: Running an EA, trading bot, script, or algorithm that was not personally written/developed by the trader using the account — including EAs that are purchased, downloaded for free, shared by another trader, or built by a third-party developer on the trader's behalf.

Why it's prohibited: Only strategies you have personally developed are permitted, so that trading activity reflects your own independent work rather than a commercially distributed or externally-authored system (which may itself violate other rules, such as HFT or Grid Trading, without your full awareness of how it operates internally).

Examples:

1. A trader purchases a "signal bot" or "EA" from a vendor's website or marketplace and runs it on their funded account.
2. A trader asks a freelance developer to code a custom EA to their specifications and then runs it — because the trader did not personally develop the code, this still falls under the restriction.
3. A trader downloads a free, publicly shared EA from a trading forum and runs it unmodified.

Edge case: Using a personally coded EA that draws on publicly available indicators or open-source building blocks (e.g., standard MACD/RSI libraries) is generally fine, since the trading logic and system as a whole is your own work — the restriction targets EAs whose overall strategy/system was built by someone else.

Definition: Allowing another person, team, or automated service — acting on someone else's decisions — to place trades on your account on your behalf, whether or not payment is involved.

Why it's prohibited: The account must be traded by the individual who holds it, based on that individual's own analysis and decisions.

Examples:

1. A trader pays a "professional account manager" or signal service to log into their account and place trades while they are unavailable (e.g., at a full-time job).
2. A trader shares their login credentials with a friend who is "better at trading" and lets them manage the account unpaid.
3. A trader connects their account to a third-party service that automatically executes trades based on another person's or team's real-time decisions, without the account holder reviewing each trade.

Edge case: Discussing trade ideas with mentors, in communities, or on signal channels is fine — the line is crossed when someone else executes trades on your account, rather than you making the final decision and placing the trade yourself.

Definition: Mirroring or duplicating trades from another trader's account onto your own — whether done manually (watching and replicating someone else's trades in real time) or via automated copy-trading/mirroring tools.

Why it's prohibited: The trading activity on the account needs to reflect the account holder's own independent analysis, not a replicated feed from someone else's account.

Examples:

1. A trader connects their account to a copy-trading platform that automatically mirrors every trade from a "master" signal provider account, matched proportionally by lot size.
2. A trader watches a friend's screen-share or live stream and manually places the identical trade, at the identical entry, every time the friend does.

Edge case: Taking a trade because you saw a signal or idea shared publicly (e.g., in a webinar or educational post) and then doing your own independent analysis before deciding to trade it is different from mechanically mirroring every entry, size, and exit from a specific account in real time.

Definition: Placing a pre-set series of buy and/or sell orders at fixed, regular price intervals above and below the current price, forming a "grid" of orders that trigger automatically as price moves, regardless of directional analysis.

Why it's prohibited: Grid trading is treated as a form of arbitrage — it isn't based on a directional market view, and it can be structured to produce a statistically near-guaranteed pattern of small wins punctuated by rare, large losses that break the strategy entirely.

Examples:

1. A trader sets pending Buy Limit orders every 20 pips below the current price and pending Sell Limit orders every 20 pips above it on Gold — as price oscillates, new positions are triggered automatically at each fixed interval.
2. An EA is configured to place a new opposing order every time price moves a fixed number of pips in either direction, continuously expanding the grid as the market moves.

Edge case: Manually placing a handful of limit orders at different technical levels (e.g., support and resistance zones identified through analysis) is not the same as a systematic, evenly-spaced grid — the issue is the mechanical, interval-based, direction-agnostic structure of a grid system.

Definition: Placing pending limit or stop orders shortly before a scheduled high-impact news release, with the specific intent of capturing the volatility spike itself — rather than the position being based on a broader market thesis.

Why it's prohibited: This approach targets the mechanical price spike and any related spread/liquidity distortion around a news release, rather than genuine market analysis, and can exploit temporary execution anomalies during high-volatility windows.

Examples:

1. Two minutes before a US Non-Farm Payrolls release, a trader places a Buy Stop and a Sell Stop straddling the current price on EUR/USD, expecting the volatility spike to trigger one side profitably regardless of the outcome.
2. A trader places a large pending order immediately ahead of a central bank interest rate decision, with no broader view on rates, simply to catch the initial spike in either direction.

Edge case: Holding a pre-existing position into a news event as part of a broader thesis (e.g., a multi-day swing trade that happens to span a data release) is different from placing a new order specifically timed and structured to exploit the news spike itself.

Definition: Trading in a way that takes advantage of a technical flaw in the platform or data feed — such as a pricing error, a stale/delayed quote, or a latency gap in how data updates — whether the flaw was found deliberately or discovered by accident and then repeatedly used.

Why it's prohibited: Profits generated this way reflect a system glitch rather than real market conditions or genuine trading skill, and can distort risk management across the platform.

Examples:

1. A trader notices that during a specific type of server hiccup, quoted prices briefly lag the real market by several seconds, and begins deliberately timing trades around this window whenever it recurs.
2. A trader discovers that a particular instrument occasionally reports an erroneous price during low-liquidity hours and repeatedly opens trades at that mispriced level before it corrects.

Edge case: If a trader stumbles onto an obvious pricing error once, closes the position, and reports it to support rather than repeating it, that's a materially different situation from systematically exploiting the same flaw — reporting suspected issues is always the right move.

Definition: Opening a position with a lot size that is disproportionately large relative to account size — creating an unrealistic level of risk on a single trade — particularly when timed around market open/close or high-impact news, when volatility and slippage risk are elevated.

Why it's prohibited: This reflects reckless risk-taking rather than sound risk management, and is often used in an attempt to hit a profit target in one or two trades rather than through consistent, disciplined trading.

Examples:

1. On a $10,000 account, a trader opens a 5.00 lot position on GBP/USD right at market open, risking a large percentage of the account on a single trade.
2. A trader who has been trading conservatively all week suddenly opens a maximum-size position two minutes before a major news release, far exceeding their typical risk per trade.

Edge case: Position sizing should scale sensibly with account size and be consistent with a stated risk-per-trade approach (commonly a small percentage of account equity). A single larger-than-usual trade with a clear, documented rationale and appropriate stop-loss is viewed differently from a pattern of consistently oversized, high-risk position sizing.