From our standpoint, overly rigid rules often unsettle genuine traders, making them apprehensive about unintentional breaches or potential misinterpretation in their favour. Yet, being ambiguous isn’t the solution either. As a result, we’ve crafted this article to articulate our expectations from our traders and define what we deem exploitative.
The trading practices we’ve prohibited are designed to eliminate prices that harm our business model of discovering and replicating unique trading strategies.
High-frequency trading (HFT) strategies
Don’t use high-frequency trading at any stage in our cooperation.
HFT strategies are not allowed during the screening test or the funded stage. Replicating HFT trading strategies presents challenges for us due to latency issues.
We’ve evaluated numerous HFT strategies; regrettably, they haven’t been profitable for our prop firm. We often find the profit in the prop accounts is significantly higher than our real trading accounts with brokers. Additionally, when we attempt to mirror your trades using a multiplier, it often results in worse average execution prices for us due to slippage.
We will quickly know if you use a HFT. In this case, we will deactivate your account, refund the payment and probably permanently bank you from PipFarm.
Prop account hedging
Don’t use multiple accounts to hedge your trades.
Prop account hedging involves using multiple accounts from the same or different prop firms to offset risks. The goal is for one account to lose while ensuring the other passes, aiming to secure a funded account without applying skill or taking risks. Clearly, this isn’t a legitimate trading strategy and doesn’t bring any value to the prop firm.
We take prop account hedging very seriously. In essence, while prop account hedging might seem like a shortcut to securing a funded account without genuine risk, it’s detrimental to both the trader and the prop firm in the long run. It masks genuine skill, distorts risk profiles, and undermines the very principles upon which prop firms operate. This practice is not ok.
Prop firm passing services
Don’t pay someone else to pass the test for you.
For some traders, undergoing an assessment feels pointless, and they seek shortcuts. However, our pre-funding screening tests play an essential role in our model. We must understand traders’ strategies, techniques and risk controls before funding. Employing a service that bypasses our screening test is a huge violation of trust.
Unlike many other prop firms, PipFarm offers a single-phase evaluation, and we don’t have minimum trading days or consistency rules. We’re not asking for much, so we urge you to treat the test with the respect it warrants.
All-in mentality
If your strategy is too aggressive, we might need to part ways (hopefully as friends)
The prop firm model allows traders to manage significant capital with relatively minimal personal risk. The fact that candidates risk only the assessment fee is a significant advantage for joining a funded trader program. However, this can also lure traders seeking to exploit this framework.
We’ve seen many traders use their entire margin to place high-stakes bets on specific or correlated instruments. They often focus on volatile markets, such as indices or commodities, where they could gain 10% in a single move. Such strategies are systematic and aggressive and may involve acquiring multiple accounts and opening high-stakes positions with an ‘all-or-nothing’ approach.
While we don’t have consistency rules, we may not accept a screening test where the profit was earned solely from one or correlated positions. We are looking for strategies, not signals. If your trading is considered too risky, we may terminate our cooperation with you, but rest assured that we will not withhold payouts for aggressive trading.
Repercussions of breaking trading rules
At PipFarm, we aim to identify and support skilled traders with unique, efficient and replicable trading strategies.
Regrettably, there’s a growing trend of traders designing strategies to simply ‘game’ the prop firm system. Therefore, we must continuously monitor for suspicious behaviour to protect our business.
We’ll terminate our relationship immediately if we’re convinced someone has resorted to such actions. However, in many situations, our decisions are based on patterns and past experiences rather than irrefutable proof. Thus, we’ll share our reservations with traders and propose a reevaluation or merely invalidate accounts and reimburse users we deem might be indulging in disallowed practices.
We urge you to avoid participating in prohibited trading activities with PipFarm. It’s counterproductive for everyone involved. We encourage open dialogue if you’re unsure about your method clashing with our guidelines. If you’re here with honest trading intentions, PipFarm welcomes you.
