High Frequency Trading (HFT):
High-frequency trading (HFT) is a trading strategy characterized by the use of sophisticated expert advisors and high-speed telecommunications networks to execute an excessive number of transactions in a matter of milliseconds to seconds. This strategy aims to capitalize on minuscule price fluctuations and exploit market inefficiencies. While HFT may seem attractive due to its potential to generate quick profits, it poses significant risks and can have detrimental effects on the market.
This is why HFT is restricted on the FXLIVECAPITAL platform:
HFT trading can distort market prices and create artificial demand or supply. By executing a large volume of transactions within seconds, HFT traders can create false impressions of market activity, influencing the decisions of other participants and leading to market manipulation. Excessive transaction volumes generated by high-frequency trading can disrupt market stability. Rapid entry and exit of orders can create volatility, leading to erratic price fluctuations and increased market uncertainty, making it difficult for other traders to make informed decisions. Due to the large number of transactions in a short period of time, servers often freeze and create consequences.
Note: If a trader receives a warning for hyperactivity and then performs a high-frequency trade (or vice versa), this may result in a more severe penalty, including account suspension. Warnings are cumulative and the system may immediately suspend accounts in cases of extreme or repeated hyperactivity or high frequency that causes a high strain on our servers.
Quick Strike Method:
The Quick Strike method is an ultra-fast trading strategy in which traders exploit the financial market by capitalizing on brief market movements through high trading volume, typically by holding positions for a very short period of time. Traders employing this strategy seek to exploit fleeting price fluctuations to secure immediate small profits. While the Quick Strike method offers the potential for quick financial gains, it also carries inherent risks.
While the allure of quick profits is tempting, the Quick Strike method can exacerbate market volatility and contribute to artificial price movements. This increased volatility can mislead other market participants, creating a distorted perception of market conditions. As a result, the Quick Strike method poses challenges to maintaining the integrity and fairness of the platform.
Here is why the Quick Strike method is restricted on the FXLIVECAPITAL platform:
The Quick Strike method is restricted on our platform due to its potential to disrupt market balance and fairness. Characterized by rapid trades and ultra-short holding periods, it raises legal concerns due to its potential to manipulate markets, create unfair advantages, and undermine regulatory objectives. This strategy involves executing numerous trades within seconds, which can inflate trading volumes and mislead other traders, leading to volatile price fluctuations and market instability. In essence, while it offers profit opportunities, its legality is questionable due to its potential adverse effects on market integrity and fairness.
Copy operations of others:
FXLIVECAPITAL allows traders to copy trade from another FXLIVECAPITAL account, proprietary firm or retail broker, as long as the accounts are owned by the same person. This means you can copy trades from any account you own.
However, Copy Trading between multiple accounts not owned by the same person, including those of relatives, family members or friends, is strictly prohibited.
Coverage or group coverage on multiple accounts:
Hedging is a risk management strategy where a trader opens two opposite trades (buy and sell) on the same asset to reduce potential losses. For example, if the market moves against one trade, the other trade may gain, minimizing overall risk.
At FXLIVECAPITAL , hedging is only allowed within the same account. This means that traders can place buy and sell orders on the same asset within one account to hedge their positions.
What is not allowed?
Hedging on multiple accounts is prohibited. This refers to placing opposite trades on different accounts for the same asset. Doing so is not considered a genuine trading strategy and may result in account termination.
Example of allowed hedging: You buy 1 lot of EUR/USD on account A and simultaneously sell 1 lot of EUR/USD on account A to hedge the position. This is allowed within the same account.
Prohibited hedging example: You buy 1 lot of EUR/USD on account A and simultaneously sell 1 lot of EUR/USD on account B to hedge the position on two accounts. This is not allowed on FXLIVECAPITAL .
Group coverage on multiple accounts:
Hedging or group hedging on multiple accounts involves opening multiple accounts and making opposite trades on the same asset in those accounts. The goal of this approach is to reduce market risk by taking advantage of price fluctuations. However, this strategy is not permitted at FXLIVECAPITAL .
Group coverage on multiple accounts:
Hedging or group hedging across multiple accounts involves opening multiple accounts and making opposite trades on the same asset in those accounts. The goal of this approach is to reduce market risk by taking advantage of price fluctuations. However, this strategy is not considered a legitimate trading practice and is prohibited because it does not reflect proper trading methodology.
Any form of arbitration negotiation:
Arbitrage trading refers to the practice of exploiting price discrepancies or time lags across different markets or platforms to generate risk-free profits. At FXLIVECAPITAL , any form of arbitrage trading is strictly prohibited due to its unethical nature and potential to disrupt fair market conditions.
Example: Arbitrage trading can distort market prices and hinder the efficient allocation of resources. By capitalizing on price discrepancies, arbitrage traders can cause prices to deviate from their true fundamental values, creating inconsistencies in market prices. A trader engages in statistical arbitrage by simultaneously buying and selling related instruments based on historical price patterns. Their trading activity distorts the market prices of these instruments, creating mismatches between their perceived value and their actual value. Furthermore, large-scale arbitrage activities can trigger rapid price movements, creating artificial market fluctuations and destabilizing the normal price discovery process.
Martingale Strategy:
The Martingale strategy is a trade management system adopted by some traders. Essentially, the strategy involves increasing position size (usually doubling) after each losing trade, with the expectation of recouping the losses on the next winning trade.
How the Martingale works:
- You start with an initial trade, for example, of $10.
- If you lose, you double your investment on the next trade (now $20).
- If you lose again, you double your previous investment (now $40) again.
- You keep doubling until you get a winning trade.
The goal is that when you win, you recover all previous losses and make a small profit equivalent to your initial investment.
Why it's banned in our rules: While the strategy may seem attractive, Martingale is extremely risky. In financial markets, there is no guarantee that a winning trade will come before accumulated losses become unsustainable. Using this strategy can lead to:
- Overexposure: Position sizes increase exponentially, quickly depleting the trader's capital.
- Massive losses: A few losing trades in a row can result in the total loss of funds.
To protect our clients and ensure responsible trading practices, the use of Martingale is strictly prohibited.
Grid Trading :
Grid trading is a strategy where a trader places multiple buy and sell orders at different price levels above and below the current market price. The goal is to profit from price fluctuations as the market moves up and down, hitting various price points.
Why is grid trading prohibited at FXLIVECAPITAL?
Grid trading is prohibited because it can lead to market manipulation and create artificial activity. It also increases risk, as a large market movement in one direction can lead to many losses simultaneously. This strategy is not in line with FXLIVECAPITAL's fair trading principles.
Example: A trader places multiple buy orders at $100, $105, and $110, and sell orders at $115, $120, and $125. If the market moves between these levels, the trader makes a profit. However, if the market drops sharply below $100, all of his buy orders will lose value, potentially causing significant losses.
One-sided bets:
One-sided betting refers to a trading strategy where a trader consistently takes positions in only one direction without considering market conditions or performing proper analysis. At FXLIVECAPITAL , one-sided betting is restricted due to its speculative nature and potential for significant losses. One-sided betting involves continuously selling or buying any instrument without considering fundamental news, economic indicators, or technical signals that suggest a possible price increase or decrease. This lack of analysis increases the likelihood of entering trades with unfavorable risk-reward ratios.
Example: A trader makes one-sided bets by continuously buying a particular instrument without considering any potential negative factors or signs of an upcoming market decline. This lack of diversification leaves them vulnerable to substantial losses if the instrument's price unexpectedly declines.
Account/Device Sharing: Account sharing refers to the unauthorized practice of sharing or reselling FXLIVECAPITAL accounts with other individuals or entities. Sharing devices with other traders, regardless of the relationship, is strictly prohibited. This behavior violates FXLIVECAPITAL's Terms of Service and is strictly prohibited. A zero-tolerance stance is maintained towards account or device sharing due to various reasons related to security, fairness, and compliance.
Other Prohibited Activities
- Exploiting errors in the Services:The Client must not, intentionally or otherwise, use trading strategies that exploit errors in the Services, such as inaccuracies in the displayed prices or delays in their updates, including practices known as Latency Trading.
- Use of external or slow data feeds:It is prohibited to execute trades using an external or slow data feed or to engage in “gap trading.”
- Trading through connected accounts for manipulation:The Client is prohibited, whether alone or in collaboration with others, from engaging in trades or combinations of trades through connected accounts or accounts maintained on the platform with the purpose of manipulating trading (commonly known as Group Trading). Examples of such manipulation include opening opposing positions simultaneously.
- Use of software or technology to manipulate:The use of any software, artificial intelligence, ultra-high-speed trading, high-frequency trading, or mass data entry that may manipulate or abuse the Provider's systems or services, or that provides an unfair advantage to the Client, is prohibited.
- Arbitrage:The performance of arbitrage (of any kind) is prohibited, including, but not limited to, arbitrage such as:• Triangular arbitrage• Statistical arbitrage• Latency arbitrage• Market-making arbitrage• Spatial arbitrage• Pairs arbitrage• Risk arbitrage• Convertible arbitrage• Volatility arbitrage• Dividend arbitrage• Tax arbitrage• Yield curve arbitrage• Or any other form of arbitrage that may exploit price differences between different markets or exchanges.
- Trades inconsistent with the market:It is prohibited to execute trades that are inconsistent with the typical operations of forex or any other financial market.The Client must avoid any activity that may cause financial harm or any other type of damage to the Provider, such as over-leveraging, overexposure, using a Martingale strategy, HFT, one-sided bets, grid trading, tick scalping, or account rolling.Participating in any of these activities could raise valid concerns regarding the intentional harm to the Provider.
- Unauthorized copy trading:Copy trading is prohibited, in which trades mimic or replicate the trading activities of other traders or entities without the Provider's prior authorization.
- Trades executed by third parties:The Client, or any third party, is prohibited from participating or collaborating in having a third party execute trades on behalf of the Client, whether that third party is a private individual or a professional, or from allowing access to or trading on the FXLIVECAPITAL Challenge Account by any third party.
- Opening inappropriately sized positions:It is prohibited to open positions with sizes notably larger than the Client’s other trades, whether in this account or another.It is also prohibited to open positions with quantities that are significantly smaller or larger than those of the Client’s other trades, whether in this account or another.
- Use of high margin or extremely risky strategies:The use of a high margin level or extremely risky trading strategies by the Client is prohibited.
- Trading during news events:At FXLIVECAPITAL, trading is allowed during news events, but with an important restriction: no trades may be opened 5 minutes before or 5 minutes after the release of a press statement.
- Trades must remain open for a minimum of 3 minutes to be considered valid.
PROHIBITED ACTIVITIES – EXCEPTIONS FOR POWER LIVE (DIRECT FUNDED)
- POWER LIVE account as a Normal Real Account:Your POWER LIVE account will now operate as a Normal Real Account, with minimal restrictions to provide you with the best trading experience.
- Allowed exceptions for POWER LIVE Accounts:• Grid Trading: Grid trading is allowed with a maximum of six (6) open positions simultaneously. Exceeding this limit will result in the affected trades being rejected.• Martingale Strategy: Trading using the Martingale strategy is allowed with a maximum of three (3) open positions simultaneously (with 2 hedging positions). Exceeding this limit will result in the affected trades being rejected.• Copy Trading: Copy trading is allowed between the user’s own trading accounts. Any account connected among multiple users will result in the termination of both identified accounts.
- Restart opportunity for violations:In cases of violation of these rules, the POWER LIVE ACCOUNT may be granted a one-time restart opportunity. Eligibility for this option will depend on the severity of the infraction. FXLIVECAPITAL reserves the exclusive right to approve or deny the restart opportunity.
- Refundable Initial Deposit (No Risk!):Achieve consistent success and generate withdrawals above 3% monthly consistently for 3 months (within a 6-month period), and your initial deposit will be fully refunded, allowing you to trade without risking your own funds.
Challenges Related to Synthetic Pairs:
- To ensure the sustainability and fairness of our program, a maximum profit cap of 10% will be applied to trades with synthetic pairs. This adjustment improves the sustainability of the products while maintaining a higher withdrawal success rate for our profitable traders.