Prohibited Strategies
It presumes that markets will eventually reverse in the trader’s favor, which is not guaranteed.
This strategy assumes that a trader has infinite funds to withstand consecutive losses.
The Martingale strategy involves increasing the size of trades following a loss in an attempt to recover losses quickly. This can manifest in various ways:
Martingale Strategy
Adding to Existing Positions: Increasing the size of an open position after it incurs a loss.
Building Gradually: Opening smaller trades that accumulate to exceed the size of the original trade.
Doubling Down: Opening a new trade with double the size of the previous losing trade.
Why Martingale is Prohibited
This involves taking positions exclusively in one direction (e.g., only buying or only selling) without proper analysis or consideration of market trends and data.
One-Sided Bets
This results in excessive exposure, as traders are effectively gambling on the market moving in one direction without accounting for potential reversals or corrections.
Such positions often disregard essential market dynamics, such as support and resistance levels,
news events, or economic indicators.
Why One-Sided Bets are Prohibited:
Why Prohibiting These Strategies is Important:
Grid trading involves placing multiple buy and sell orders at predefined price intervals above and below a central price point. The goal is to capitalize on market fluctuations between the set levels.
Grid Trading
Market Ignorance: It does not adapt to changing market conditions, which can lead to significant losses when the market trends strongly in one direction.
Resembles Gambling: The strategy depends heavily on random market movements without factoring in technical or fundamental analysis.
Why Grid Trading is Prohibited:
Risk of Overexposure: Traders often end up with numerous open positions, leading to excessive risk if the market moves unfavorably.
Against Fair Trading: Our commitment to fair trading requires ensuring equal opportunities for all participants, which HFT undermines.
High-frequency trading refers to executing trades with extremely short holding periods, typically 60 seconds or less. This strategy aims to exploit minor price movements multiple times within a short timeframe.
High-Frequency Trading (HFT)
Market Disruption: Rapid trade execution can lead to increased market volatility, which affects overall trading conditions.
Unfair Advantages: HFT often leverages advanced algorithms and infrastructure that may not be accessible to all traders, creating an uneven playing field.
Why HFT is Prohibited:
1.Unlimited Capital
This method is extremely risky as losses compound rapidly, leading to catastrophic financial consequences. Therefore, it is against our trading rules to protect traders and the trading environment.
2.Infinite Winning Probability
2.Fair Trading Environment
By adhering to these rules, traders can focus on sustainable and responsible trading practices that contribute to long-term success.
1.Risk Management
These strategies inherently expose traders to excessive risk, often resulting in significant financial losses.
By prohibiting unfair practices like HFT, we ensure that all traders have equal opportunities to succeed.
Unchecked use of risky strategies can lead to market instability, affecting all participants.
3.Market Integrity
Prohibited Strategies: Detailed Explanation
To promote fair trading practices and manage risks effectively, we strictly prohibit certain trading strategies. Below is a more detailed explanation of the prohibited strategies and the reasons behind these rules:
While the Martingale approach may appear to provide a pathway to recover losses efficiently, it relies on two highly impractical assumptions:
Prohibited Strategies
Holding positions for extended periods, such as overnight or over weekends, requires careful consideration of market conditions and specific account rules.
Holding Positions
Trailing drawdown rules are designed to ensure that traders manage their risk effectively while rewarding consistent performance.
Prohibited Practices
Profit split scaling is designed to reward traders based on their performance and preferences, giving them flexibility in how they share profits with the firm.
Profit Split Scaling
More Trading Rules