What is the Rapid Fire Trading Rule?
The Rapid Fire Trading Rule (formerly referred to as the HFT Rule) is designed to regulate high-frequency trading practices that exploit market inefficiencies and disrupt the trading ecosystem. It specifically targets repetitive, high-volume trading patterns within short timeframes, ensuring fair trading conditions for all participants.
This rule applies to the following challenge types:
Dragon
Rapid
Standard
Knight
Knight Pro
Royal Pro
Royal
Classic 1 step
Classic 2 step
Traders participating in any of these challenge types must ensure their strategies comply with this rule. Repeated violations may result in disqualification, denial of payouts, or account termination.
How Does the Rule Work?
The rule monitors and flags trading activities that exhibit specific rapid-fire patterns, considering the frequency of trade executions, the ratio of opened and closed positions, and unique position IDs. This ensures that trading remains within acceptable behavioral norms and prevents manipulative practices.
Key Parameters for Flagging Trades
Trading Volume Thresholds:
X deals within 3 seconds
X deals within 10 seconds
X deals within 30 seconds
X deals within 1 minute
X deals within 1 hour
Opening and Closing a Position:
Each position includes one “in” (open) and one “out” (close) deal.
The ratio of “outs” must be less than 25% of total deals in a streak.
The ratio of “ins” must be at least 75% of total deals in a streak.
Additional Considerations:
Partial Closes: Partial closes are not excluded from streak calculations entirely; rather, they are grouped into a single "event" to prevent double counting within a streak.
If a single position has multiple partial closes within a short timeframe (e.g., 10 seconds), they will be treated as one closing event rather than multiple separate transactions. This ensures that rapid partial closes do not artificially inflate trade counts within a streak.
However, if multiple different positions have partial closes within the same timeframe, each of those positions will be counted individually toward the streak threshold.
This distinction ensures that traders who close positions incrementally are not unfairly flagged, while still maintaining the integrity of streak calculations for multiple trades executed in rapid succession.
Unique Position IDs: Ensure accurate tracking.
Streak Overlap: A new streak begins only after the previous one ends.
Profit Deduction:
If multiple streaks occur within one day, total profit from flagged streaks will be deducted and it will counta s 1 strike towards the 3 strikes
Disciplinary Actions
First and Second Warnings:
A warning will be issued.
Any profits earned through trades flagged under the Streak Risk Escalation Rule will be deducted from the trader’s account balance.
If the trader progresses to the next phase before profits can be deducted, the deduction will apply to the next phase’s account.
Losses incurred during these trades remain unchanged but will count toward the warnings.
Third Violation:
Upon the third violation within a phase, the trader’s account will be breached.
Why is the Rule Important?
This rule ensures:
Market Integrity: Prevents manipulative trading patterns that destabilize markets.
Fairness: Creates equal opportunities for all traders.
Platform Stability: Reduces the risk of systematic abuse, preserving long-term reliability.
Do Warnings Carry Through the Challenge?
Yes, warnings carry through the lifecycle of your account for all prohibited strategies.
General Warning System Details
First and Second Warnings:
When a violation is detected, the trader will receive a formal warning.
If the violation includes profitable trades, those net profits will be deducted.
Losses from these trades are not refunded but still count toward the warning system.
Third Warning:
On the third violation of the same strategy type, the account will be breached.
Additional actions may be taken depending on the severity and pattern of violations.
Important Note:
If a deduction from a rule violation causes your account to breach the daily loss limit or maximum loss limit, the responsibility remains with the trader. This includes all strategy violations where the impact of the deduction pushes the account beyond acceptable risk parameters.
Examples of Violations Under the Rapid Fire Trading Rule
Here is a detailed breakdown of examples illustrating how the Rapid Fire Trading Rule applies to different scenarios. Each example provides specific conditions, an analysis of compliance with the rule, and the resulting action. Along with these examples, we have also attached a Google Sheet where you can view real examples that were previously actioned for better understanding and transparency.
EXAMPLE SHEET WITH PREVIOUS VIOLATIONS
Example 1: Violation – Profit Deducted
Scenario: Open 4 positions on EURUSD, USDCAD, USDJPY, and GBPUSD to trigger 4 “in” deals within 10 seconds. No “out” deals are triggered.
Total Deals: 4
Conditions:
4 deals within 10 seconds: ✅
“Ins” ≥ 75%: ✅ (100% “in” deals, 0% “out” deals)
“Outs” < 25%: ✅ (0% “out” deals)
Result: Violation
Reason: Meets the criteria for Rapid Fire Trading based on the frequency of trades and compliance with “in” and “out” ratios.
Profit Deducted: $500
Example 2: Violation – Profit Deducted
Scenario: Open 4 positions on EURUSD, USDCAD, USDJPY, and GBPUSD to trigger 4 “in” deals, then close 1 EURUSD position (“out”) within 10 seconds.
Total Deals: 5
Conditions:
5 deals within 10 seconds: ✅
“Ins” ≥ 75%: ✅ (80% “in” deals, 20% “out” deals)
“Outs” < 25%: ✅ (20% “out” deals)
Result: Violation
Reason: The trade frequency and ratio of “ins” to “outs” trigger a violation.
Profit Deducted: $400
Example 3: No Violation
Scenario: Open 6 positions on EURUSD, USDCAD, USDJPY, and GBPUSD (“in”) and close 3 EURUSD positions (“out”) within 1 minute.
Total Deals: 9
Conditions:
9 deals within 1 minute: ✅
“Ins” ≥ 75%: ❌ (66.7% “in” deals, 33.3% “out” deals)
“Outs” < 25%: ❌ (33.3% “out” deals)
Result: No Violation
Reason: The ratio of “out” deals exceeds 25%, disqualifying this streak as a Rapid Fire Trading violation.
Example 4: Violation – Profit Deducted
Scenario: Open 8 positions on EURUSD, USDCAD, USDJPY, and GBPUSD (“in”) and hit the Take Profit (TP) for 2 EURUSD positions (“out”) within 1 minute.
Total Deals: 10
Conditions:
10 deals within 1 minute: ✅
“Ins” ≥ 75%: ✅ (80% “in” deals, 20% “out” deals)
“Outs” < 25%: ✅ (20% “out” deals)
Result: Violation
Reason: The trading frequency and ratio meet all violation criteria.
Profit Deducted: N/A (Specific amount to be determined based on total profit)
Example 5: Violation – Profit Deducted
Scenario: Open 8 positions on EURUSD, USDCAD, USDJPY, and GBPUSD (“in”) and hit the Stop Loss (SL) for 2 EURUSD positions (“out”) within 1 minute.
Total Deals: 10
Conditions:
10 deals within 1 minute: ✅
“Ins” ≥ 75%: ✅ (80% “in” deals, 20% “out” deals)
“Outs” < 25%: ✅ (20% “out” deals)
Result: Violation
Reason: Meets all Rapid Fire Trading violation parameters.
Profit Deducted: N/A (Specific amount to be determined based on total profit)
Example 6: No Violation
Scenario: Open 30 positions on EURUSD, USDCAD, USDJPY, and GBPUSD (“in”) and close 10 positions (“out”) within 1 hour.
Total Deals: 40
Conditions:
40 deals within 1 hour: ✅
“Ins” ≥ 75%: ✅ (75% “in” deals, 25% “out” deals)
“Outs” < 25%: ❌ (20% “out” deals)
Result: No Violation
Reason: The total ratio of “outs” does not exceed the threshold, and the trades adhere to the rules.
Example 7: No Violation
Scenario: Open 30 positions on EURUSD, USDCAD, USDJPY, and GBPUSD (“in”) and close 25 positions (“out”) within 1 hour.
Total Deals: 55
Conditions:
55 deals within 1 hour: ✅
“Ins” ≥ 75%: ❌ (54.5% “in” deals, 45.5% “out” deals)
“Outs” < 25%: ❌ (45.5% “out” deals)
Result: No Violation
Reason: The ratio of “outs” exceeds 25%, and the streak fails the Rapid Fire Trading criteria.
Example 8: Violation – Profit Deducted
Scenario: Two consecutive streaks occur on the same day, with the following details:
Streak 1: Open 30 positions (“in”) and close 5 positions (“out”) within 1 minute.
Total Deals: 35
Profit: $450
Result: Violation
Streak 2: Open another 30 positions (“in”) and close 5 positions (“out”) within 1 minute.
Total Deals: 35
Profit: $500
Result: Violation
Total Profit Deducted: $950
Reason: Both streaks independently violate the Rapid Fire Trading Rule.
These examples highlight the nuances of detecting and enforcing the Rapid Fire Trading Rule, helping traders better understand and adhere to the guidelines.
Frequently Asked Questions
What counts as a “deal”?
A deal refers to an opening (“in”) or closing (“out”) of a position. Each position can have one “in” and one “out.”
Are partial closes included?
No, partial closes are excluded from streak calculations.
Can streaks overlap?
No, a new streak begins only after the previous streak ends.
What happens if a violation is detected?
The total profit from the flagged streak(s) will be deducted, and repeat violations may result in stricter disciplinary actions.
Why is this rule enforced?
It promotes fairness, transparency, and stability in trading, ensuring that all participants operate on a level playing field.
When will I be notified of a violation?
Notifications for violations will be issued between 5 PM EST and 11 PM EST for trades executed on the previous day. This ensures thorough analysis of trading activity before any actions are taken.
I placed some orders, and then I got an email from TFT stating that profits would be deducted because of HFT. But I placed the trades manually—what’s the problem here?
The Rapid Fire Trading Rule is not based on whether you’re using an automated trading system. It’s about leveraging a specific strategy that violates our parameters. Please review all the parameters and examples outlined in the article to fully understand how the rule works and why your trades may have been flagged.
Is placing 3-4 different forex pair trades at once considered HFT or layering? I kindly request you don’t send an FAQ as it doesn’t really answer this.
If you are opening 4 positions within 10 seconds on different forex pairs, this will be flagged as a violation under the Rapid Fire Trading Rule. It is important to review the parameters for Rapid Fire Trading to avoid violations.
How many trades can I place at once before it’s considered layering or HFT? Kindly answer and don’t send me the FAQ.
The Rapid Fire Trading Rule will flag trades if:
• You place 4 trades within 10 seconds,
• You place 6 trades within 1 minute, or
• You place 40 trades within 1 hour.
If your trading activity exceeds these thresholds, it will be flagged.