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Prohibited trading strategies that violate the TFT rules and Terms of Use
Prohibited trading strategies that violate the TFT rules and Terms of Use

Restrictions to trading strategies that violate the TFT Terms of Use (ToU) policy

Updated over a week ago

We Welcome Legitimate Traders

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.

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 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.

  1. Two TFT accounts grid trading against each other: Account 1 & Account 2

  2. Two TFT accounts grid trading against each other: Account 1 & Account 2

  3. Grid trading between different firms: Account

  4. Grid trading between different firms: Account

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.

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.

  • For a more in-depth overview of High-Frequency Trading, review this Investopedia article.

Trading in US-Sanctioned Countries

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 via our live chat or by emailing [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.


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.

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:

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