All strategies are allowed if they comply with risk management rules. However, the following practices are prohibited:
Exploiting Errors or Latency in Pricing/Platform
Explanation: Taking advantage of delays or mistakes in the broker’s pricing or platform to make a profit.
Example: If a platform displays incorrect currency pair prices due to a glitch, exploiting these discrepancies for financial gain is prohibited.
Utilizing Non-Public and/or Insider Information
Explanation: Trading based on confidential information that is not available to the public.
Example: Using knowledge of an impending merger announcement obtained through private sources to profit in forex or stock markets.
Front-Running of Trades Placed Elsewhere
Explanation: Placing trades based on foreknowledge of large market-moving trades being placed by others.
Example: Knowing that a large institutional trade is about to occur and placing your own trade beforehand to capitalize on the resulting market movement.
Jeopardizing Broker Relationships or Trade Cancellation
Explanation: Engaging in activities that could damage the company's relationship with its brokers or lead to trades being voided.
Example: Using practices that trigger the broker's risk management alerts, such as consistently placing trades that exceed market norms.
Creating Regulatory Issues for the Broker
Explanation: Trading in ways that violate financial regulations, leading to issues for the broker.
Example: Trading in restricted markets or assets without the proper licenses or permissions.
Using Third-Party, Off-the-Shelf, or Marketed Strategies
Explanation: Employing pre-made or publicly marketed strategies, especially ones designed specifically to pass challenge accounts.
Example: Using a widely sold EA (Expert Advisor) that’s advertised as a “prop firm pass strategy.”
Changing Strategies After Account Funding
Explanation: Using one trading strategy to pass the evaluation phase and switching to a different one once funded.
Example: Using a low-risk strategy to meet evaluation requirements but then transitioning to high-risk scalping on a funded account.
Utilizing Martingale or Average-Down Strategies
Explanation: Doubling down or adding to losing trades, which is considered unsustainable in the long term.
Example: Placing increasingly larger trades after a loss to recover losses quickly (e.g., doubling trade size after each losing trade).
Arbitrage Between Accounts
Explanation: Exploiting price differences between two accounts, whether with the same company or different companies.
Example: Simultaneously buying an asset in one account and selling it in another to profit from slight price mismatches.
“All-Inning” or Excessive Risk-Taking
Explanation: Placing excessively high-risk trades repeatedly, often risking the entire account balance.
Example: Using all available margin to place a single trade, risking the entire account on one market movement.