Proprietary trading firms such as FXIFY provide traders with a funded account to trade the financial markets. In return, traders are expected to adhere to strict guidelines that safeguard the firm’s capital and maintain market integrity. These rules not only help the firm mitigate risk but also encourage traders to adopt disciplined and sustainable trading strategies.
Key FXIFY Trading Rules and Prohibited Strategies
FXIFY enforces a strict set of trading rules to ensure that traders operate within ethical and sustainable boundaries. While the firm provides traders with the freedom to execute their strategies, certain practices are strictly prohibited due to their potential for market manipulation, unfair advantages, and violation of risk management principles.
1. High-Frequency Trading (HFT)
Definition: High-frequency trading (HFT) involves executing a large number of trades within milliseconds using automated algorithms. These trades take advantage of small price discrepancies in the market, often resulting in a high turnover rate.
Why It’s Prohibited: HFT can disrupt market stability, create artificial liquidity, and give traders an unfair advantage. FXIFY does not allow HFT because it contradicts the firm’s emphasis on disciplined and strategic trading.
2. Reverse Hedging
Definition: Reverse hedging is when a trader opens opposite positions on multiple accounts to eliminate risk exposure. For example, if a trader goes long on EUR/USD in one account and short in another, they essentially negate any market movement.
Why It’s Prohibited: Reverse hedging manipulates risk management guidelines and prevents FXIFY from assessing a trader’s real ability. This practice is viewed as exploiting the firm’s rules rather than engaging in genuine trading.
3. Group Hedging
Definition: This occurs when multiple traders collaborate to hedge trades against each other using different accounts, often leading to risk-free profits for the group.
Example: Trader A buys GBP/USD while Trader B sells GBP/USD at the same lot size. Regardless of the outcome, they collectively minimize risk and attempt to bypass FXIFY’s trading rules.
Why It’s Prohibited: Group hedging circumvents FXIFY’s profit-sharing structure and undermines fair trading practices. The firm strictly monitors trading accounts to prevent coordinated activities of this nature.
4. Account Management (Third-Party Trading)
Definition: This rule prohibits traders from allowing others to trade on their behalf or managing accounts for multiple individuals.
Why It’s Prohibited: FXIFY wants each trader to be accountable for their own performance. Unauthorized account management could lead to issues such as inconsistent trading behavior, unfair profit-sharing, and a lack of transparency.
5. Latency Arbitrage
Definition: Latency arbitrage exploits differences in price feeds between brokers. Traders using this method place trades based on delayed price data from one broker compared to another.
Why It’s Prohibited: FXIFY ensures fair execution of trades, and latency arbitrage exploits technical inefficiencies rather than real trading skills.
6. Order Book Spamming
Definition: This involves placing large numbers of fake buy or sell orders to create false liquidity and manipulate price movements.
Why It’s Prohibited: Order book spamming misleads traders by distorting real market demand and supply, which can create unfair advantages for those who use it.
7. News Trading with Excessive Leverage
Definition: Trading with high leverage during major news events such as interest rate decisions, employment reports, or geopolitical events.
Why It’s Prohibited: FXIFY discourages reckless gambling-like behavior. Large price swings during news events can cause significant slippage and expose traders to unnecessary risks.
General Trading Rules
In addition to prohibited strategies, FXIFY enforces general trading rules that ensure traders operate responsibly.
1. Risk Management Rules
FXIFY emphasizes risk management through daily and overall drawdown limits. Traders must ensure they do not violate these limits to maintain eligibility.
- Daily Drawdown Limit: Traders must not exceed a specific percentage of account loss in a single day.
- Maximum Drawdown Limit: The total loss across multiple days must not exceed a set threshold.
2. Account Growth Scaling Plan
FXIFY rewards consistently profitable traders by increasing their account size over time. This allows traders to scale their capital and earn higher profits while maintaining strict risk parameters.
3. Profit Splits and Withdrawals
FXIFY operates on a profit-sharing model where traders receive a percentage of their earnings.
Example: A trader generating $10,000 in profits may receive a 75% split ($7,500), while FXIFY keeps the remaining 25% ($2,500). Profit withdrawal schedules depend on account types and trader performance.
Risk Management Strategies for FXIFY Traders
To maintain long-term success, traders must adopt robust risk management strategies:
- Position Sizing: Using appropriate lot sizes to avoid overexposure.
- Stop-Loss Orders: Setting predefined exit points to minimize losses.
- Risk-to-Reward Ratios: Ensuring trades offer a favorable return compared to potential losses.
- Avoiding Overtrading: Sticking to a structured trading plan instead of making impulsive decisions.
Trader Psychology in Prop Firm Trading
Successful trading is not just about technical skills—it also requires mental discipline. Traders must develop:
- Emotional Control: Avoid revenge trading or making impulsive decisions based on losses.
- Patience and Consistency: Stick to a strategy rather than chasing quick profits.
- Confidence Without Overconfidence: Trusting one’s strategy while avoiding reckless behavior.
Conclusion
FXIFY prop firm trading rules are designed to foster a fair and disciplined trading environment. Traders who understand and abide by these rules can benefit from funded accounts, profit-sharing opportunities, and the potential to scale their accounts. By maintaining proper risk management, developing strong trading psychology, and following ethical practices, traders can maximize their chances of long-term success within FXIFY’s proprietary trading ecosystem.
Understanding the trading rules at FXIFY is crucial for traders who wish to succeed and scale their accounts. Violating any of these rules can lead to disqualification or loss of funding.
Frequently Asked Questions (FAQs)
Can I use Expert Advisors (EAs) with FXIFY?
FXIFY allows EAs but prohibits any EA that engages in latency arbitrage, group hedging, or high-frequency trading.
What happens if I violate a trading rule?
Violating FXIFY’s rules may result in a warning, loss of funding, or a permanent ban from the program.
How long does it take to receive profit withdrawals?
Withdrawals are typically processed within a few business days, depending on the trader’s chosen payment method.
Can I trade cryptocurrencies on FXIFY?
Yes, FXIFY allows trading in forex, indices, commodities, and cryptocurrencies, provided traders adhere to the firm’s guidelines.
