At TFT, we pride ourselves on having an open and inclusive trading environment for all who abide by our Terms of Use. We value and respect all traders, regardless of the trading style, strategy, or statistical approaches used. However, it must be noted that any form of cheating, fraud, or abuse of the simulated trading environment is unacceptable and violates the TFT Terms of Use. Such behaviors may result in warnings, account suspensions, or even account termination. Any form of cheating and abuse of the simulated environment is strongly prohibited and goes directly against the TFT ToU that all traders agree to when signing up for our services. We strongly encourage all members of TFT to read this article and TFT's Terms of Use policy in their entirety to avoid unintended repercussions.
At TFT, our primary goal is to empower traders to generate trading date. The essence of our firm is rooted in attempting to collect legitimate, practical trading insights, measured through comprehensive risk factors and metrics, which have the potential of being reproducible to trade under real market conditions by third parties. To assist TFT in this objective, we have developed a statistical analysis methodology to compare individual traders against the average population of traders in both the challenge and funded phases. We use this methodology, incorporating certain risk factors and various trading metrics, to review trading data, identifying traders whose practices are inconsistent with our objective or otherwise constitute an abuse in our determination of the trading environment in which we operate.
Any account, regardless of the phase, may be subject to an internal statistical review of trading activity, behavior, patterns and account data at any time. Without limiting the foregoing, funded account payout requests, as well as all associated customer trading and KYC/CIP data associated with the relevant account, any accounts for the same or related beneficial trader, and data that is otherwise identified by our data anomaly detection systems are subject to further review. These reviews are performed using metrics designed to identify potential violations of our terms of use, customer agreement or trading practices that are not actionable in live market scenarios. Please reference the article sections below for additional information, exemplifying some of the non-actionable trading data scenarios and violations. Based on such reviews, TFT may in its sole discretion undertake and execute one or more of the following actions:
Challenge disqualification and/or;
Profit deductions and/or;
Issuance of warnings and/or;
Account suspensions and/or;
Payout denials and/or;
Payout delays and/or;
Account termination and/or;
Suspension of services.
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.
Our Funded Traders are expected to be trading on their accounts as if they are live 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
Grid (Reverse) Trading
Grid trading is a trading strategy that involves placing inverse buy and sell orders of the same instrument for the exact or similar risk. This strategy can lead to market manipulation, over-leveraging, market instability, and a potential risk-free simulated profit.
As members of the TFT community, it is crucial to have a well-defined risk management strategy in place to avoid large simulated Drawdowns and over-leveraging. Therefore, the use of grid trading is a prohibited trading strategy.
For more information, please see the Hedging or Group Hedging Across Multiple Accounts section below.
Traders who leverage grid trading will be banned as this behavior goes against TFT Terms of Use.
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.
Martingale Trading
The Martingale trading strategy is a method of investing in which the size of the investment is increased after each simulated loss, with the expectation that a winning trade will recoup all previous simulated losses and produce a simulated profit. This strategy is considered gambling and is extremely risky as it can lead to large simulated Drawdowns and the simulated loss of all simulated capital if a trader experiences a prolonged series of simulated losses.
In theory, this strategy will always work, but in practice, it is only possible to make this strategy work with unlimited simulated capital. Firms provide a pre-determined level of maximum simulated Drawdown and all traders should formulate their strategy around this predefined level of maximum risk.
It is crucial to have a well-defined risk management strategy in place and to avoid betting an entire account on a single trade. Therefore, this trading activity goes against TFT's Terms of Use.
For a more in-depth overview of martingale trading, review this Investopedia article.
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.
High-Frequency Trading (HFT)
Usage of HFT bot(s), HFT Expert advisors (EA), and HFT algorithms are strictly prohibited on our platforms and should not be used under any circumstances.
High-Frequency Trading (HFT) refers to the use of advanced computer algorithms and high-speed telecommunications networks to execute large numbers of trades in fractions of a second.
HFT is prohibited as it can lead to market manipulation, unfair advantages, and can cause instability in the market. Any trader found to be engaging in HFT will breach the TFT Terms of Use and lose the ability to trade on our platform. For more specific examples of the type of abuse that HFT can lead to, please see the Trading on Delayed Data Feed and Trading on Delayed Trading Chart sections below.
High-Frequency Trading (HFT) refers to complex algorithmic trading in which large numbers of orders are executed within short time periods.
One form of HFT which is prohibited is Latency Arbitrage. Latency arbitrage is a trading strategy that takes advantage of the time delay between the execution of a trade and the receipt of market data.
For a more in-depth overview of High-Frequency Trading, review this Investopedia article.
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.
Trading Activity: Soft Breaches/Warnings
The following are examples of trading behaviors and activities that will result in soft breaches and warnings that can escalate to the breach of your accounts and possible ban from our community.
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].
News Trading
News trading is a strategy traders use to take advantage of the market's reaction to economic or political news and events. This can include things like interest rate decisions, GDP reports, and political announcements. News trading can be risky as the market reaction to news events is often unpredictable and can lead to significant simulated losses.
Therefore, The Funded Trader has certain restrictions for Simulated Funded Accounts only in terms of trading at a time of significant macroeconomic reports and being filled at an unrealistic price due to the volatility of the event.
To learn more about the exact details of what restrictions we have for news trading at TFT, visit this knowledge center article.
Order Layering
Order layering refers to a trading strategy wherein customers intentionally split up positions into multiple smaller trades executed around the same time. The primary aim of this strategy is to mitigate simulated market conditions slippage by lowering the "static slippage associated with the size of the order."
In simulated trading environments, such as those provided by TFT, order layering can be perceived as advantageous due to the absence of real liquidity consumption. Unlike in live markets, where each order consumes liquidity from the order book, simulated orders do not have a corresponding counterparty, allowing them to be filled repeatedly against the same book without appropriate slippage adjustments.
It is crucial to recognize that order layering constitutes an abusive practice within the simulated trading environment. By repeatedly splitting up positions into smaller trades, traders manipulate the system's mechanics to their advantage, distorting the intended simulation of real market conditions.
Customers found engaging in this abusive strategy may face disciplinary actions, including but not limited to removal of profits gained from layered orders. Such profits will be deducted from payouts, and if this action causes a breach of any terms of service or trading policies, the customer is held responsible. Upholding these policies ensures the integrity and fairness of our platform's trading environment for all users.
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: