Minimum holding time rules: the fine print that decides whether a scalper is welcome

[Shadow Trader]

Some brokers write a minimum trade duration into their terms, often 30 or 60 seconds. Trades closed sooner may be cancelled, have their profits removed, or get the account flagged for review. Others never mention it in writing and simply act when a pattern shows up in the data.

The rule is usually justified as protection against latency exploitation, where someone buys on a stale price and sells moments later. For an honest scalper with a 20-second average hold, though, it can be a dealbreaker, and the line between the two can look thin from the broker's side.

Several details matter and are often vague. Does the limit apply to all trades or only profitable ones? Is the clock measured from order sent, from fill, or from the platform's own timestamp? What exactly happens to a trade that breaks the rule: is it voided, is the profit clawed back, or does the account just get a warning?

A clause that mentions "excessive short-term trading" without a number is a warning sign, because it leaves the decision entirely to the broker, and the decision tends to be made after a trader has been profitable for a while.

Reading the terms before funding is the cheap part. A written answer from support is better. Something like "trades under ten seconds are allowed and will not be penalised" is worth screenshotting and saving, since chat transcripts have a way of disappearing.

It also helps to know the distribution of hold times in the trade history. A strategy whose median is 45 seconds but whose tail includes dozens of five second trades will look different to a compliance script than one that never goes under 40.

Some traders deliberately avoid brokers that mention such rules at all, preferring the ones that say nothing and prove it by processing withdrawals without fuss over several years.

Has a broker ever enforced a minimum hold time that was never written down?