Hedging Policies:
Hedging across multiple accounts, even those belonging to the same trader, is strictly prohibited. Hedging, which involves opening opposing positions on the same asset, undermines fair trading and disrupts the integrity of our platform.
High-Frequency Trading:
High-Frequency Trading (HFT) typically involves opening many trades within a short time and closing them within a few seconds. However, it's important to note that while scalping, which is a form of trading that involves holding positions for a few minutes, is allowed, engaging in HFT is prohibited. If HFT is detected in your account, it could lead to account termination. This means that if you're manually executing trades at a very high frequency, you could be at risk of having your account closed.
Latency Trading:
Latency trading refers to the practice of executing trades based on delayed market data or exploiting delays in the execution of trades to secure guaranteed profits. At OFP Funding, latency trading is strictly prohibited due to its unethical nature and violation of fair trading practices in the financial markets.
Copy Trading From Others:
Copy-Trading between multiple accounts not owned by the same individual, including those of relatives, family members, or friends, is strictly prohibited.
Hedging or Group Hedging Across Various Accounts:
Hedging or group hedging across multiple accounts refers to a trading tactic where a person or group opens multiple accounts and executes opposing trades on the same asset across all accounts. This strategy aims to capitalize on price fluctuations while minimizing market risk. However, it does not reflect genuine trading intelligence and is prohibited.
Any form of Arbitrage Trading:
Arbitrage trading refers to the practice of exploiting price discrepancies or time lags across different markets or platforms to generate risk-free profits. 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 pricing. A trader engages in statistical arbitrage by simultaneously buying and selling related instruments based on historical price patterns. Their trading activity distorts the market pricing of these instruments, creating misalignments between their perceived value and their actual worth. Also, Large-scale arbitrage activities can trigger rapid price movements, creating artificial market fluctuations and destabilizing the normal price discovery process.
Tick Scalping:
Tick scalping refers to a trading strategy where traders aim to profit from small price fluctuations by executing a high volume of trades within a short time frame. Limitations have been imposed on tick scalping as a result of its capacity for market manipulation and disruptive trading practices.
Example: A tick scalper uses automated trading algorithms to scalp ticks on instruments. By executing trades at lightning speed, they can exploit even the smallest price movements, effectively front-running other market participants and gaining an unfair advantage. The rapid influx of orders and subsequent cancellations can strain market liquidity, making it challenging for other traders to execute their trades at fair prices.
Grid Trading:
Grid trading refers to a trading strategy where opposing buy and sell orders for the same financial instrument, have similar risk parameters. Grid trading is prohibited due to its potential for market manipulation, over-leveraging, market instability, and the pursuit of risk-free profits.
Example: A trader employs grid trading by simultaneously placing buy and sell orders on a particular currency pair with the intention to profit from price oscillations. By repeatedly executing these opposing orders, they can create the illusion of market activity, influencing other participants' trading decisions. A trader utilizes grid trading with aggressive leverage, opening numerous buy and sell positions on a volatile market. Despite the appearance of a controlled strategy, the accumulated exposure to price movements and the associated leverage can result in substantial losses if the market moves unfavourably.
One-sided Betting:
One-sided betting refers to a trading strategy where a trader consistently takes open and close positions in a single direction without considering market conditions or conducting the proper analysis.
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 potential price increase or decrease. This lack of analysis increases the likelihood of entering trades with unfavourable risk-reward ratios.
Example: A trader engages in one-sided betting by continuously buying a particular instrument without considering any potential negative factors or indications of an upcoming downturn in the market. This lack of diversification leaves them vulnerable to substantial losses if the instrument price unexpectedly declines.
Account Sharing/Device Sharing:
Account sharing refers to the unauthorized practice of sharing or reselling OFP Funding accounts with other individuals or entities. Sharing devices with other traders is strictly prohibited, regardless of the relationship. This behaviour violates our Terms of Service and is strictly prohibited. A zero-tolerance stance towards account sharing or device sharing is maintained due to several reasons related to security, fairness, and compliance.
Bracketing strategy by opening pending orders around high-impact news. It consists of opening buy and sell stops close to the price before the news.
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.
Gambling
This involves excessive use of leverage and risking a large portion of your account on limited trades, for example, using over 50% of your margin on the opening of your positions.
Opening a trade with a lot size 3.5 times bigger/lower than the most used lot per asset is considered gambling.
Not presenting a strategy can be considered gambling.
Opening positions and closing them as soon as they are in profit while leaving the losses run is considered gambling.
The following example will highlight the differences between a strong strategy and a weak strategy.
Example:
In these two examples, we can see a consistent and legitimate strategy.
The average duration for a winning trade is 129 minutes while losing trades last 91 minutes.
The average duration for a winning trade is 69 minutes while losing trades last 35 minutes.
In this case, we can see that the trader's strategy is to close the trades as soon as they are profitable and leave the losing traders running until they are close to 0. This is a risky strategy because there is no calculation of the risk before the trades are opened.
The average winning trade duration is 400 minutes, while losing trades lasts for 2748, almost 7 times longer.
