Prohibited Strategies at Prop Firms: Latency Arbitrage, Tick Scalping, and Grey Areas

[FXS Prop Desk]

Every prop firm lists "prohibited trading practices". Some are obvious, others are vaguely worded. A walk through the common ones:

• Latency arbitrage: exploiting a delayed price feed against a faster one. Banned everywhere.
• Tick scalping / HFT: usually defined as trades held under a minimum time (often 30–60 seconds) making up a large share of activity.
• Hedging across accounts or firms: opening opposite positions to guarantee passing one account.
• Gap trading: opening right before market close to catch the weekend gap.
• Martingale/grid without stops: sometimes banned, sometimes only "discouraged".

The grey zone is the minimum hold time. A scalper holding trades 40–90 seconds can be near the line on some firms. If your average hold time is short, ask support in writing which threshold applies and keep the reply.

Equally useful: check whether the rule is applied to the evaluation or only at payout review. Discovering it at payout is the worst case.

What is the shortest average hold time you have seen accepted by a firm without questions?