Most account terminations for "prohibited trading" come down to one thing: the trader never knew where the line was. The fastest way to protect your account is to understand precisely what each banned practice is - not a vague warning, but a clear definition. This guide defines every prohibited practice at Fewpips, why it is prohibited, and how it is detected during a compliance audit.
The governing principle is simple. Fewpips runs a simulated evaluation environment designed to measure genuine, repeatable trading skill. Any technique that profits by exploiting the simulation, the price feed, or the execution layer - rather than by reading the market - is prohibited. If a strategy would not work against a real market with real liquidity, it does not belong here.
Why Prohibited Practices Exist
- Fairness. Latency exploits, arbitrage, and one-sided betting give an artificial edge that has nothing to do with trading skill.
- Market integrity. Manipulative order flow and feed exploitation distort the environment for everyone.
- Protecting simulated capital. The rules keep the evaluation meaningful so that funded traders are genuinely skilled.
- Discouraging gambling. Excessive leverage and all-or-nothing bets are not trading - they are coin flips with the firm's downside.
Latency Arbitrage & Tick Scalping (The Sub-30-Second Rule)
This is the rule behind the most recent wave of enforcement, so the definition matters. Latency arbitrage is profiting from small delays between a broker's quoted price and the true market price - effectively trading on stale prices the feed has not yet updated. Tick scalping is capturing individual price ticks through pure speed and order placement rather than market analysis.
Fewpips defines these by holding time. Positions opened and closed within 30 seconds are classified as latency-arbitrage style trades and are prohibited. Any position held for less than 30 seconds may be flagged as a hard violation during a compliance audit.
HFT & System Abuse
High-frequency trading (HFT) means automated strategies that fire large volumes of orders at very high speed to exploit micro-inefficiencies in execution or the data feed. On a simulated platform this is system abuse: it tests the infrastructure, not trading skill. HFT and any form of system or feed abuse are prohibited on all account types.
Copy Trading
Copy trading means replicating the trades of another account - either copying someone else's signals into your Fewpips account, or having your account mirrored to or from others. Because it does not demonstrate your skill and is frequently used to farm multiple accounts off one signal, copy trading is prohibited across challenge and funded accounts.
Hedging Between Accounts
Cross-account hedging means opening opposing positions on the same instrument across two or more accounts so that one side is guaranteed to win regardless of market direction. It converts the evaluation into a no-risk arbitrage on the firm's capital and is strictly prohibited. (Hedging within a single account as a normal trading technique is a separate matter; the prohibition is on coordinating positions between accounts.)
Grids, Martingales & One-Sided Betting
Extreme grid and martingale strategies - stacking ever-larger positions into a loss to force an average-down recovery - are prohibited because they convert disciplined risk into a blow-up waiting to happen. One-sided betting means using the funded account as a free option: taking an all-or-nothing position with no genuine risk management, where the trader keeps the upside and the firm absorbs the downside. Both are banned.
Multi-Account & Infrastructure Abuse
- Multi-account scaling abuse / group coordination: coordinating the same strategy across many accounts to multiply payouts from a single edge.
- Multiple IPs without justification: trading the same accounts from many locations to mask coordination or replication.
- Replication farms: server setups that clone one trader's orders across numerous accounts.
- Artificial volume creation & arbitrage exploitation: manufacturing trade volume or exploiting pricing gaps that do not reflect genuine trading.
- Feed exploitation: profiting from data-feed quirks or latencies rather than market moves.
- Trading third-party accounts or selling accounts: accounts must be traded by their genuine owner and may not be sold or transferred.
The Per-Trade Risk Cap and the "Trade Idea" Definition
Closely related to prohibited practices is the per-trade risk cap. No single trade idea may lose more than 2% of the account starting balance. Importantly, Fewpips defines a "trade idea" precisely so the rule cannot be gamed by splitting one position into many: all entries on the same symbol, in the same direction, opened within a 10-minute window are treated as one trade, and their combined profit and loss is assessed against the 2% limit.
EAs & Bots: Allowed, But Only Under Strict Compliance
Automation is not banned outright on challenges, but it is tightly controlled:
- On CFD challenge accounts, EAs and bots are permitted only with prior approval and submission of strategy documentation, under strict compliance.
- EAs and bots are not permitted on funded accounts (CFD funded, Instant, and Futures funded).
- Regardless of approval, these automated behaviours are always prohibited: HFT, latency arbitrage, tick manipulation, extreme grids and martingales, replication across multiple IPs, and copy trading.
How Violations Are Detected
Prohibited activity is identified during the post-trade compliance audit that every account undergoes before a payout or funded upgrade. The audit checks holding times (the sub-30-second flag), order patterns, cross-account correlation, IP and device data, and rule criteria. Violations breach the account immediately - there are no warnings.
Frequently Asked Questions About Prohibited Trading
Is scalping allowed at Fewpips?
Yes, scalping as a style is allowed - but you cannot rely on sub-30-second round trips. Any position opened and closed within 30 seconds is classified as latency-arbitrage style and may be flagged as a hard violation. Hold trades for 30 seconds or more and normal scalping is fine.
Can I use an Expert Advisor (EA) or bot?
On CFD challenge accounts, only with prior approval and submitted strategy documentation, under strict compliance. EAs and bots are not permitted on any funded account. HFT, latency arbitrage, copy trading, and extreme grids/martingales are never allowed, approved or not.
What counts as hedging between accounts?
Opening opposing positions on the same instrument across two or more accounts so one side is guaranteed to profit regardless of direction. This removes genuine risk and is prohibited. It is different from a hedging technique used within a single account.
Why is copy trading banned if I am only copying my own strategy?
Copy trading is prohibited because the evaluation must demonstrate your own discretionary or approved-automated skill on that account, and mirroring is routinely used to farm multiple accounts from one signal. Trade each account on its own merits.
What happens if I am flagged for a prohibited practice?
Violations breach the account immediately upon detection. For latency-arbitrage style trades (sub-30-second), the audit can treat it as a hard violation. There are no warnings, so it is critical to stay clearly inside the rules.
None of these rules restrict genuine trading. They exist to make sure that when Fewpips funds you, it is funding skill that works against a real market - which is exactly the kind of trader who keeps a funded account and gets paid.