At TFT, we are committed to maintaining a fair and transparent trading environment. To do this, all traders must strictly follow our Terms of Use. Any form of cheating, fraud, or abuse of the simulated trading environment is prohibited and will result in consequences such as warnings, account suspensions, or account terminations.
Our goal is to protect the firm and the community by ensuring responsible trading practices. We review trading data to identify activities that violate our Terms of Use or cannot be applied in real market conditions. All accounts may be subject to internal statistical reviews at any time to monitor trading activity and behavior. This includes reviewing payout requests, trading data, and KYC information to identify potential violations of our Terms of Use. Based on these reviews, we may take actions such as disqualifying challenges, deducting profits, suspending accounts, or denying payouts if violations are found.These reviews may happen at any time, and accounts found in violation may face the following actions:
• Challenge disqualification
• Profit deductions
• Account suspensions
• Payout delays or denials
• Account termination
This process helps us maintain a safe and trustworthy trading space for everyone.
If a review indicates with reasonable assurance in TFT’s sole determination that a violation or prohibited activity has occurred, including but not limited to behavior described as “gambling,” “punting” or “account churning,” TFT exercises its right to take and implement without prior notice one or more of the firm actions referenced above, in accordance with our customer agreement and Terms of Use.
We remind you of our core mission: facilitating the creation of actionable trading data.
Cheating Is Prohibited
Any trading styles that are deemed as "cheating", or otherwise not reflective of trading in the real market, are not permitted and will result in a violation of our Terms of Use. For this reason, it is against our rules to take advantage of strategies that generate risk-free, consistent simulated profits only on demo accounts.
Any use of a strategy that takes advantage of demo accounts will result in the closure of a Funded Trader’s account, whether in the evaluation phase or while funded.
Please note that using any account management, “pass your challenge”, and/or copy trading services is also strictly prohibited and will result in the rejection of any Simulated Funded Accounts, as well as a permanent ban of all TFT services.
Example Strategies That Violate Our Rules
Account Sharing or Account Sale
Traders are restricted from the sharing of accounts or the re-sale of Simulated Funded Accounts from one owner to another for any reason.
Account sharing and the selling of accounts are strictly prohibited and will result in the immediate breach of your account(s) and being banned from our services as this behavior goes against TFT Terms of Use.
Abuse of the Simulated Environment
Clear abuse of the simulated environment is characterized by continuously executing large-volume trades without a clear or logical trading strategy. This behavior disregards fundamental market analysis and risk management practices and does not provide us with viable trading data. Accounts engaging in consistent, high-volume trades without a coherent strategy may be flagged for review. This allows us to assess and take appropriate action to maintain a fair trading environment consistent with our mission of obtaining credible trading data.
Accounts identified to be consistently executing large-volume trades without a clear strategy may face warnings, temporary limitations on trading activities or in severe cases, suspension, or termination to uphold the platform's trading policies.
Trading in US-Sanctioned Countries
Traders are restricted from logging in and raising orders in OFAC-sanctioned countries.
See our list of restricted countries in this TFT knowledge center article.
Collusion Between Users
Collusion between users refers to a trading strategy where an individual or group of individuals open multiple accounts with a financial institution and place trades in the same direction (i.e., buy/sell), on the same asset, across all accounts. Collusion between users is also known as "layering" or "spoofing" and is considered a form of market manipulation.
This type of trading behavior is strongly prohibited and will result in the breaching of all accounts and the banning of the trader.
Hedging or Group Hedging Across Multiple Accounts
Hedging or group hedging across multiple accounts, on the other hand, refers to a trading strategy where an individual or group of individuals open multiple accounts with a financial institution and place trades in opposite directions (i.e., buy/sell), on the same asset, across all accounts.
This can be done in an attempt to simulated profit from the price movements of an asset without having to take on significant market risk.
This type of trading behavior is also known as "Arbitrage" and "Grid Trading" and is not permitted at TFT. In the real market, this would result in $0 simulated profit as you are hedged in both directions.
However, while trading with a Firm, you would be losing the firm money on one account and generating a simulated profit on the other, resulting in risk-free simulated profits, which are violations of compliance with the functioning of the real financial market.
Use of a Delayed Data Feed
The use of a delayed data feed in day trading refers to the practice of using a data feed that has a delay or lag in the delivery of market data, such as stock prices or trading volumes, giving an unfair advantage to the trader over other traders who are required to use real-time market data.
Using a delayed data feed is considered unethical and is not in compliance with the operations of the real financial market. Therefore, this trading behavior goes against TFT's Terms of Use.
Trading on Delayed Charts
Trading on delayed charts refers to the practice of using charts or other graphical representations of market data that have a delay or lag in their updates.
Trading on delayed charts is considered unethical and is not in compliance with the operations of the real financial market. Therefore, this trading behavior goes against TFT's Terms of Use.
Use of guarantee of compliance with limit orders (including take profit and stop loss)
The use of a guarantee of compliance with limit orders, including take profit and stop loss, is prohibited as it can be used to circumvent regulatory restrictions and manipulate the market.
This type of abuse is due to the nature of trading on a simulated platform. However, when using this guarantee of compliance with limit orders, traders may be able to avoid the fills that they would have received in the real market, making this strategy not in compliance with the operations of the real financial market. Therefore, this trading behavior goes against TFT's Terms of Use.
Use of Platform or Data Freezing Due to a Demo Server Error
The use of platform or data freezing due to a demo server error is prohibited as it can lead to unfair advantages and misleads the traders. Traders found to be engaging in this practice will be investigated and may lose the ability to use our demo servers.
Of course, if we have a server issue that causes delays and prohibits you from closing trades for stop simulated loss or take simulated profit, we will see this in our logs and will work with those traders to remedy the situation. We encourage you to take screenshots or screen recordings of any freezing issues you are experiencing so that we may address them with our trading platform provider.
All traders are expected to use the demo servers in a fair and honest manner and to report any errors or issues immediately to TFT's support team by emailing us at [email protected].
Warning and Violation System for Prohibited Trading Strategies
At TFT, we actively monitor trading activities to ensure compliance with our Terms of Use. If a trader violates these terms, a structured warning system is applied:
For prohibited trading strategies—Order Layering, High-Frequency Trading, Martingale Trading, Grid Trading, Copy Trading, and Latency Arbitrage—the warning and violation system is as follows:
Warning System Across Phases:
Warnings accumulated for each prohibited strategy will carry throughout the lifecycle of the account (Phase 1, Phase 2, Phase 3, and Funded Account). For example:
If you receive a warning for Copy Trading in Phase 1, a second warning in Phase 2, and a third warning in the Funded Account, your account will have accumulated three total warnings and will then be breached.
Independent Warnings by Strategy Type:
Warnings are tracked independently for each strategy. For instance:
If you receive one warning for Copy Trading and two warnings for Grid Trading, your account will not be breached.
A breach only occurs when one specific prohibited strategy accumulates three warnings.
Warning and Violation System for News Trading
For News Trading, the system is slightly different:
Resetting Warnings Between Phases:
Warnings reset as you progress between phases. This means:
You can receive up to 3 warnings in Phase 1, up to 3 warnings in Phase 2, and up to 3 warnings in the Funded Account before breaching.
General Warning System Details
First and Second Warnings:
When a violation is detected, the trader will receive a warning.
For profitable trades marked as violations, net profits will be deducted. Losses from trades remain unchanged but still count toward the warning system.
Third Warning:
Upon receiving a third violation for a specific strategy type, the account will be breached, and further actions may be taken.
Warnings carry forward through the lifecycle of the account for all prohibited strategies except News Trading, where warnings reset with each phase.
Thresholds for Violations:
Specific thresholds determine when a violation has occurred. Each warning is issued upon reaching the threshold, ensuring transparency and fairness in our trading environment.
Types of Prohibited Trading Strategies
1. News Trading and Violations:
News trading involves taking advantage of market reactions to significant economic or political events such as interest rate decisions, GDP reports, or major political announcements. These events often cause rapid market volatility, which can lead to unpredictable price movements and potential trading risks.
To ensure fairness and protect the integrity of simulated market conditions, The Funded Trader enforces specific restrictions on select challenge and funded accounts (Standard, Knight, Royal, Rapid, Dragon) during high-impact news events, monitored via the Forex Factory Calendar. These restrictions prevent trades from being executed at unrealistic prices due to the extreme volatility during such events.
Disciplinary Actions for Violating News Trading Rules
If a trader violates news trading restrictions, the following actions will be taken:
First and Second Violations:
A warning will be issued.
Any profits earned during the news event will be deducted from the account balance.
Losses incurred during these trades will remain unchanged but will count toward the warnings.
Third Violation:
Upon the third violation within a phase, the trader’s account will be breached.
This may result in the suspension or termination of the account, depending on the severity of the breach.
Warnings Reset Between Phases:
Unlike other prohibited strategies, warnings for News Trading reset at the beginning of each new phase (e.g., Phase 1 to Phase 2, Phase 2 to Funded Account).
Example Scenario:
A trader places multiple trades during the release of a high-impact GDP report, aiming to capitalize on rapid market movements. TFT’s system identifies this as a violation:
After the first two violations, the trader receives warnings, and profits from these trades are deducted.
On the third violation within the same phase, the account is breached, resulting in the suspension or termination of trading privileges.
This approach ensures fairness and encourages adherence to news trading restrictions across all account phases.
To learn more about the exact details of what restrictions we have for news trading at TFT, visit this knowledge center article.
2. Order Layering and Violations:
Order layering is a trading strategy where traders intentionally split large positions into multiple smaller trades, executed around the same time. The main goal of this tactic is to avoid simulated market slippage by reducing the static slippage associated with larger orders. In TFT’s simulated trading environment, order layering can be particularly advantageous because simulated orders do not deplete real liquidity from an order book, as they would in a live market. This allows for multiple orders to be filled at favorable prices without the natural market slippage that would occur in a real scenario.
However, order layering is considered an abusive practice in simulated environments, like the one TFT provides. By repeatedly splitting trades, traders exploit system mechanics, creating an unrealistic simulation of actual market conditions. This practice undermines the integrity of the trading environment and violates TFT’s Terms of Use.
Disciplinary Actions for Order Layering
Currently, violations such as order layering, high-frequency trading (HFT), martingale trading, copy trading, grid trading, and latency arbitrage are being handled manually until we have automation in place. Here’s how the process works for these violations:
1. First and Second Warnings:
For each violation, a warning will be issued.
If the profits associated with the violation bring your account below the passing threshold:
You may be moved back to the previous phase of your account progression.
If your account remains above the threshold, you may still progress to the next phase despite the warning.
2. Third Warning and Deductions:
If you are upgraded to a Funded Account and a violation is later detected:
Profits from the violation will be deducted from your most recent challenge account.
Your account will be reverted to the previous phase prior to the deduction.
This process ensures that all traders are held to the same standards while we work towards fully automating the detection and handling of violations.
For example:
A trader opens a large position and splits it into X amount of smaller trades within seconds to reduce slippage. This pattern is detected by TFT’s systems. On the first two instances, the trader is warned, and any profits from those layered trades are deducted. However, after the third time this happens, the trader’s account breaches, resulting in the suspension of trading activities and potential termination of the account.
3. High-Frequency Trading (HFT) and Violations:
High-Frequency Trading (HFT) involves the use of advanced algorithms and high-speed telecommunications to execute numerous trades within fractions of a second. The use of HFT bots, Expert Advisors (EAs), and HFT algorithms is strictly prohibited on our platform.
HFT can lead to market manipulation, unfair advantages, and instability, which violates the principles of fair trading and TFT’s Terms of Use. One common form of HFT, Latency Arbitrage, exploits the delay between market data updates and trade execution, taking unfair advantage of the system.
Disciplinary Actions for HFT
Currently, violations such as order layering, high-frequency trading (HFT), martingale trading, copy trading, grid trading, and latency arbitrage are being handled manually until we have automation in place. Here’s how the process works for these violations:
1. First and Second Warnings:
For each violation, a warning will be issued.
If the profits associated with the violation bring your account below the passing threshold:
You may be moved back to the previous phase of your account progression.
If your account remains above the threshold, you may still progress to the next phase despite the warning.
2. Third Warning and Deductions:
If you are upgraded to a Funded Account and a violation is later detected:
Profits from the violation will be deducted from your most recent challenge account.
Your account will be reverted to the previous phase prior to the deduction.
This process ensures that all traders are held to the same standards while we work towards fully automating the detection and handling of violations.
For example:
A trader uses a HFT strategy, placing trades at ultra-high speeds to take advantage of data delays. TFT’s monitoring system detects this pattern. On the first two instances, warnings are issued and profits are deducted. However, after a third violation, the account breaches, and trading privileges are revoked.
For a more in-depth overview of High-Frequency Trading, review this Investopedia article.
4. Martingale Trading and Violations
Martingale trading is a strategy where the trader increases the size of their position after each loss, with the expectation that a future winning trade will recover all previous losses and generate a profit. This method is highly risky and resembles gambling, as it can lead to significant drawdowns and potentially the loss of all capital if a trader experiences a prolonged losing streak.
While the theory suggests that Martingale trading can recover losses, in practice, it requires unlimited capital—something that is not available in any trading scenario. With pre-determined maximum drawdowns, traders must formulate their strategies around defined risk levels, making Martingale trading incompatible with TFT’s Terms of Use.
Disciplinary Actions for Martingale Trading
Currently, violations such as order layering, high-frequency trading (HFT), martingale trading, copy trading, grid trading, and latency arbitrage are being handled manually until we have automation in place. Here’s how the process works for these violations:
1. First and Second Warnings:
For each violation, a warning will be issued.
If the profits associated with the violation bring your account below the passing threshold:
You may be moved back to the previous phase of your account progression.
If your account remains above the threshold, you may still progress to the next phase despite the warning.
2. Third Warning and Deductions:
If you are upgraded to a Funded Account and a violation is later detected:
Profits from the violation will be deducted from your most recent challenge account.
Your account will be reverted to the previous phase prior to the deduction.
This process ensures that all traders are held to the same standards while we work towards fully automating the detection and handling of violations.
For example:
A trader loses a series of trades and increases their position size significantly, expecting a single win to recover their losses. TFT’s system detects the Martingale pattern, and the trader is warned twice, with profits deducted. After a third violation, the account is breached, and further trading is halted.
It is critical to implement a well-defined risk management strategy and avoid putting an entire account at risk on a single trade. Martingale trading, with its extreme risk profile, goes against TFT’s Terms of Use.
For a more in-depth overview of martingale trading, review this Investopedia article.
5. Grid Trading and Violations:
Grid trading is a strategy where traders place both buy and sell orders on the same instrument, often in inverse directions, with similar levels of risk. This can lead to market manipulation, over-leveraging, and in some cases, the potential for risk-free simulated profits due to instability in the market.
As part of the TFT community, it is essential to maintain a well-defined risk management strategy to avoid large drawdowns and prevent over-leveraging. Therefore, grid trading is a prohibited strategy as it goes against TFT’s Terms of Use.
Disciplinary Actions for Grid Trading
Currently, violations such as order layering, high-frequency trading (HFT), martingale trading, copy trading, grid trading, and latency arbitrage are being handled manually until we have automation in place. Here’s how the process works for these violations:
1. First and Second Warnings:
For each violation, a warning will be issued.
If the profits associated with the violation bring your account below the passing threshold:
You may be moved back to the previous phase of your account progression.
If your account remains above the threshold, you may still progress to the next phase despite the warning.
2. Third Warning and Deductions:
If you are upgraded to a Funded Account and a violation is later detected:
Profits from the violation will be deducted from your most recent challenge account.
Your account will be reverted to the previous phase prior to the deduction.
This process ensures that all traders are held to the same standards while we work towards fully automating the detection and handling of violations.
For example:
A trader engages in grid trading, a strategy that places a series of buy and sell orders at predefined intervals within a set price range. For instance, a trader selects the price range of $50–$60 and sets grid levels at $1 intervals.
• Initial Setup:
• Buy orders are placed at $49, $48, and $47.
• Sell orders are placed at $51, $52, and $53.
• Execution:
When the price moves from $50 to $51, the buy order at $50 is executed and closed at $51, securing a $1 profit. A new buy order is then placed at $50 to maintain the grid structure. This process repeats as the market oscillates within the range.
While this strategy seeks to profit from market volatility, TFT prohibits grid trading because it can manipulate the system to generate risk-free profits, undermining fair trading conditions.
6. Copy Trading and Violations:
Copy trading is a strategy where one trader automatically mirrors the trades of another. This allows a trader to replicate another’s trading activity without conducting their own analysis. While copy trading can be useful for inexperienced traders, it creates an unfair environment when applied to simulated trading accounts, as it may distort individual performance and risk management.
On certain TFT account types, copy trading is prohibited as it bypasses the need for traders to develop their own strategies and manage their own risk.
Disciplinary Actions for Copy Trading
Currently, violations such as order layering, high-frequency trading (HFT), martingale trading, copy trading, grid trading, and latency arbitrage are being handled manually until we have automation in place. Here’s how the process works for these violations:
1. First and Second Warnings:
For each violation, a warning will be issued.
If the profits associated with the violation bring your account below the passing threshold:
You may be moved back to the previous phase of your account progression.
If your account remains above the threshold, you may still progress to the next phase despite the warning.
2. Third Warning and Deductions:
If you are upgraded to a Funded Account and a violation is later detected:
Profits from the violation will be deducted from your most recent challenge account.
Your account will be reverted to the previous phase prior to the deduction.
This process ensures that all traders are held to the same standards while we work towards fully automating the detection and handling of violations.
For example:
A trader links their account to copy the trades of another trader, mirroring every position. TFT detects this pattern. On the first two instances, the trader is warned and profits are deducted. After the third violation, the account is breached and trading is suspended.
This ensures the integrity of individual trading efforts within TFT’s platform.
7. Latency Arbitrage and Violations:
Latency arbitrage is a trading strategy that exploits the delay (or latency) between the reception of market data and trade execution. Traders using this method take advantage of price discrepancies caused by the delay in updating price feeds, allowing them to execute trades at favorable prices before the system reflects real-time changes.
This strategy creates an unfair advantage in simulated environments like TFT’s, where real liquidity and price discovery are absent. As a result, latency arbitrage is strictly prohibited on the platform, as it distorts the intended market simulation and violates TFT’s Terms of Use.
Disciplinary Actions for Latency Arbitrage
Currently, violations such as order layering, high-frequency trading (HFT), martingale trading, copy trading, grid trading, and latency arbitrage are being handled manually until we have automation in place. Here’s how the process works for these violations:
1. First and Second Warnings:
For each violation, a warning will be issued.
If the profits associated with the violation bring your account below the passing threshold:
You may be moved back to the previous phase of your account progression.
If your account remains above the threshold, you may still progress to the next phase despite the warning.
2. Third Warning and Deductions:
If you are upgraded to a Funded Account and a violation is later detected:
Profits from the violation will be deducted from your most recent challenge account.
Your account will be reverted to the previous phase prior to the deduction.
This process ensures that all traders are held to the same standards while we work towards fully automating the detection and handling of violations.
For example:
A trader capitalizes on a price feed delay, placing trades at outdated prices before the system updates. TFT detects the latency arbitrage pattern. After two warnings and profit deductions, a third violation results in the account breach, suspending the trader from further activity.
Resetting to a Previous Phase: Criteria and Requirements
If a trader is reset to a previous phase due to violations, they must meet that phase’s specific criteria again to progress. These requirements include:
Profit Target: Traders must achieve the phase’s designated profit target. If profits were deducted, only the deducted amount needs to be regained, not the full profit target for the phase.
Minimum Trading Days: Traders must complete the required number of trading days for that phase, supporting consistent trading practice and providing a fair evaluation of performance.
The Daily March (if applicable): Traders must meet the phase’s minimum profitable days, ensuring they use effective trading strategies and sound risk management.
Re-qualifying for the phase reinforces a trader’s commitment to their strategy and ensures alignment with the trading program’s standards. Failure to meet any of these criteria will delay progression to the next phase and may lead to further warnings or deductions.
Closing Remarks
These are the most common strategies that we have seen people use to take advantage of demo accounts, though this list does not represent all possible strategies that would go against our trading rules. If any account is seen to be using unfair strategies or an unrealistic trading style, they will not be eligible to be funded, and Simulated Funded Accounts may be breached. Keep in mind that all trading on our platform must be in agreement with the real operations of the financial market. Our statistical assessments and reviews continue to be refined as more data is obtained, such that a situation that hypothetically might not have been identified as problematic once, could be flagged in the future.
If a strategy is found not to be replicable in the real market, we reserve the right to investigate this strategy and terminate your access to our services.
To learn more, please visit the below resources: