What are the prohibited strategies?

• High-Frequency Trading (HFT)

Using EAs to rapidly open and close trades within seconds is strictly prohibited. These systems exploit micro price movements and take advantage of them.

Using High-Frequency Trading (HFT) bots, Expert Advisors (EA), and HFT algorithms is not allowed on our platforms under any circumstances.

HFT involves using advanced computer programs and high-speed networks to make lots of trades very quickly, often in fractions of a second. We prohibit HFT because it can lead to market manipulation, give unfair advantages, and cause market instability. If any trader is found using HFT, they will violate our Terms of Use and will be banned from trading on our platform. For examples of HFT abuse, please refer to the sections on Trading on Delayed Data Feed and Trading on Delayed Trading Chart below.

HFT includes complex trading strategies that execute many orders in a very short time. One prohibited HFT strategy is Latency Arbitrage, which exploits the time delay between when a trade is made and when market data is received.

• Tick Scalping

Opening and closing positions within a very short time (such as 2 minutes or less, typically a few seconds to a couple of minutes) based on minimal price fluctuations is not permitted. This includes strategies that rely solely on small price moves rather than genuine market direction or analysis.

• Hedging or Group Hedging Across Multiple Accounts

Simultaneously placing both buy and sell positions in the same account or across different accounts to minimize risk or form arbitrage is not allowed.

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 the same firm or different firms 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 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 Audacity Capital. 

However, while trading with a Firm, you would be losing the firm money on one account and generating a profit on the other, resulting in risk-free profits, which are violations of compliance with the functioning of the real financial market.

• Averaging Down / Martingale Strategies

Opening more positions when a trade moves against your initial bias, regardless of lot size, is considered high-risk and is strictly prohibited.

The Martingale trading strategy is a way of trading where you increase the lot size that you trade after each loss, hoping that a win will recover all the previous losses and make a profit. This method is like gambling and is very risky because it can lead to big losses and losing all your money if you have a long losing streak.

In theory, this strategy always works, but in real life, it only works if you have unlimited money. Companies set a limit on how much you can lose, and traders should plan their strategy based on this limit.

It's important to have a clear plan to manage risks and not risk your entire account on one trade. Therefore, this kind of trading is not allowed at Audacity Capital.

• Dollar Cost Averaging

Dollar Cost Averaging(DCA) is a way of trading where you keep on opening a position of the same lot size or a different size every time the trade starts going against your bias, hoping that the price will reverse eventually and you will end up making a profit.

This strategy is effective while investing in an asset for long term, however, while trading with prop firms it is risky and could let to drawdown violations if the price fails to reverse.

We require our traders to have a proper trading plan and solid risk management while trading with us rather than simply adding more positions to a losing trade, hence this trading style is prohibited.

• Use of Third-Party Expert Advisors (EAs)

Only personally developed EAs (Expert Advisors) are allowed. Using commercially available or third-party EAs created by someone else is strictly not permitted.

• Account Management by Third Parties

Allowing another person or service to trade on your behalf, whether paid or unpaid, is not allowed under any circumstances.

• Copy Trading

Mirroring or duplicating trades from another trader’s account, whether manually or via automated tools, is not permitted.

• Grid Trading

Placing a series of buy and/or sell orders at predefined intervals to create a price grid is considered a form of arbitrage and is not allowed.

• One-Sided Bets During News Events

Placing pending orders (limit or stop) shortly before high-impact news events with the intent to capitalize on volatility is not allowed.

• Exploitation of System Vulnerabilities

Deliberately or inadvertently using trading strategies that exploit flaws in the system, such as pricing discrepancies or latency in data updates, is not permitted

• Uncritical Directional Trading

The practice of systematically initiating trades in a single direction without rigorous market assessment or strategic justification, reflecting a mechanical and unconsidered trading process, is not permitted.

• Automated Multi-Trade Activity

A trading approach characterized by opening multiple positions simultaneously, typically facilitated by automatic trading tools, indicates that the trader is not directly overseeing or actively managing the strategy is not permitted.

• Lot size abuse

Opening trades with unrealistic risk relative to account size, especially at market open/close or during news, is prohibited.

Note: The Risk team reviews the account when you pass the challenge or request a payout and if any nefarious activities are found then AudaCity Capital has the right to ask the traders to change their trading strategy or even breach the account in some cases.