What are your prohibited strategies?

2 min. readlast update: 10.15.2024

Certain strategies are strictly prohibited in both the challenge and funded stages:

  • High-frequency trading (manual or automated)
  • Hedge arbitrage trading
  • Tick scalping
  • Grid trading
  • One-sided betting
  • Latency arbitrage trading
  • Reverse arbitrage trading
  • Martingale strategy
  • Hedging
  • Copying trades from other traders

Detection of any of these strategies in your live account will be considered a rule violation, and your account may be terminated.


Martingale strategy Vs Dollar cost averaging definitions
Banned Strategy:

Martingale Trading with Lot Multiplier: This version of the Martingale strategy involves increasing the position size by a fixed multiplier, often 2, after each losing trade. The goal is to recover losses with a larger position in the next trade when the market moves favourably. Each successive trade increases the position size, creating an exponential increase in exposure. This method assumes that a winning trade will eventually occur, covering all prior losses and yielding a net profit due to the increased position size.

 

E.g., if the first trade opens with 1 lot and the price continues to go against the trader. If using a lot multiplier, the trader increases the lot size by 1.5 times after each trade.

Example:

Trade 1: 1 lot

Trade 2: 1.5 lots

Trade 3: 2.25 lots

Trade 4: 3.375 lots

Allowed Strategy:

Martingale trading without a lot multiplier (DCA): In this approach, the trader adds to the number of open trades after a position enters drawdown, but without adhering to a strict multiplication factor for position size. Instead, the trader gradually increases the total exposure by opening additional positions as the price moves against the original trade. The size of each new position is not increased as part of a cost-averaging strategy. This method adds to the risk with each trade, though in a more linear fashion compared to the multiplier approach.

 

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