Prop firm prohibited strategies are the trading methods and account practices a firm will not accept, even when every loss limit is respected. A conduct violation is often found after the fact, during a pass review or a payout check, so it can cost more than a failed attempt: the profit itself may not count.
The lists differ by firm, but the reasoning is consistent. This guide groups the common bans, shows what the firms we compare publish, and sets out what the QATS terms prohibit.
Why firms prohibit some strategies
An evaluation is meant to show that a trader can produce results under fixed risk rules, in a simulated market that approximates real execution. Published bans typically fall into four broad groups.
- Exploiting the simulation: trading on stale or wrong prices, latency games and fills that could not happen in a live market.
- Removing risk: opposite positions across accounts, so one account passes whichever way the market moves.
- Replacing the trader: shared logins, paid passing services and copying another person’s trades.
- Hiding tail risk: position doubling such as martingale, which looks steady until one losing run ends the account.
Prop firm prohibited strategies at a glance
| Strategy | What it is | Why firms restrict it |
|---|---|---|
| Martingale | Doubling size after each loss to recover the run with one win | A losing streak grows the position geometrically |
| Grid | Resting orders at fixed intervals that add size as price moves | Exposure builds against a trend with no planned exit |
| Latency arbitrage | Trading on a delayed or stale price before it updates | The profit comes from the feed, not from the market |
| HFT and tick scalping | Very high order rates or holding periods of seconds | Results depend on simulated fills and load the platform |
| Account sharing and passing services | Someone else trades or passes the account | The firm is no longer evaluating the account holder |
| Cross-account hedging | Opposite positions on the same market across accounts | One account passes whichever way price moves |
| Copying another person | Following a signal provider or another trader’s account | Many accounts end up trading one strategy |
What the firms we compare publish
These are the strategy restrictions recorded in the automation policies on our comparison pages, last checked 2026-10-29. None of the firms is recorded with a martingale-specific rule, which does not mean none has one: a firm’s full terms are longer than our summary.
| Firm | Recorded policy |
|---|---|
| QATS | Bots, the Trader API, TradingView webhooks and Bot Builder allowed under the same rules as manual orders; prohibited conduct is listed in the QATS Prop Terms |
| HyroTrader | Allowed“Trading bots connected via API are permitted.” HFT, copy trading and signal providers are banned. |
| Crypto Fund Trader | Allowedwith restrictions: HFT, tick scalping, arbitrage, news-scalping and reverse-trading EAs are banned. |
| Funded Trading Plus | “You can also use EAs, Algos or Bots.” Arbitrage, grid trading and tick scalping are banned. |
| Blue Guardian | EAs and copiers permittedHFT, tick-scalping and arbitrage bots banned |
| Goat Funded Trader | Self-built EAs are allowed; third-party EAs are not allowed at any time, and HFT is banned. |
| Apex Trader Funding | Automation, including AI and HFT, is prohibited on all account types. |
| Topstep | “Custom automated strategies and bots are allowed” through the TopstepX API; HFT is banned and there is no API on Live Funded accounts. |
| E8 Markets | EAs allowedon CFD and perpetual accounts unless several users execute the same trades; automation is banned on futures accounts. |
| Breakout | No official statement foundA third-party listing reports API and automated trading as supported; cross-account copying is reportedly prohibited. |
Martingale and grid: the loss limits do the banning
Martingale doubles the size of the next trade after each loss, so that one win recovers the run. The arithmetic works only while the account can absorb the streak. Starting at 0.5% risk, here is a run of consecutive losses against the 4% daily limit of a QATS Crypto evaluation:
| Loss | Risk on this trade | Cumulative loss | Against the 4% daily limit |
|---|---|---|---|
| 1 | 0.5% | 0.5% | Inside the daily limit |
| 2 | 1% | 1.5% | Inside the daily limit |
| 3 | 2% | 3.5% | Inside the daily limit |
| 4 | 4% | 7.5% | Daily limit reached during this trade |
Where QATS stands on doubling and grids
The current QATS terms and trading rules do not name martingale or grid trading as prohibited categories, and the terms state that where a category of strategy is not allowed, QATS publishes an understandable description before applying it.
What stops a doubling strategy on QATS is the loss limits. In the run above, the daily limit is reached on the fourth consecutive loss, and touching it fails the account on a Crypto evaluation. A grid that keeps adding against a trend is the same problem in slower motion: each filled level adds size, and the combined open loss counts toward the daily limit before anything closes.
Latency arbitrage, stale prices and HFT
Latency arbitrage means trading a simulated price that lags a faster feed. The profit depends on the feed rather than the market, so it is commonly prohibited, and several firms we compare also ban tick scalping and arbitrage bots.
The QATS terms prohibit, where it matters to a result, knowingly exploiting frozen, stale or plainly wrong prices, forcing fills that could not occur under the published simulation, deliberate latency or queue manipulation, and artificial volume. QATS also checks market entries before they fill: an entry can be refused when the QATS price is too old, held while the same perpetual on Binance and Bybit is too far apart, and refused when the price you saw has moved too far from the QATS price.
High-frequency trading or HFT bots are banned at several firms we compare, including HyroTrader, Crypto Fund Trader, Blue Guardian, Goat Funded Trader, Apex Trader Funding and Topstep. On QATS, automation must stay within the instrument, exposure, order-rate and API limits published for the plan, and a burst of commands is refused with TRADING_RATE_LIMITED. The terms also state that short holding periods and a strategy that performs well are not, by themselves, evidence of abuse.
Account sharing, passing services and copying other people
A firm evaluates a named person, so letting someone else trade the account defeats the evaluation. Paid passing services, rented funded accounts and shared logins are commonly banned.
The QATS terms say that the trader area, the trading interface and any API credentials are issued to you and must not be sold, lent, shared or operated by anyone else. They also prohibit buying or selling a service that completes someone else’s Evaluation, renting or transferring a passed account, and rotating identities to evade published limits.
Copying is narrower. QATS has a built-in copier, but every account in a copy group must be your own active QATS account, and each copied order passes that account’s own rules. Current QATS plans do not allow cross-account hedging: an order that would hold the opposite side of a market you already hold in another of your QATS accounts is refused with CROSS_ACCOUNT_HEDGE.
What happens when a rule is broken
Outcomes vary by firm: a failed evaluation, a denied payout, closure of linked accounts or a ban on buying again. Because many of these checks happen at the pass or payout stage, a prohibited strategy can look successful right up to the review.
Under the QATS terms, QATS may refuse an individual order, correct an objectively wrong fill, exclude affected trades, suspend an affected account or declare an attempt unsuccessful where the evidence supports it and the response is proportionate. An adverse decision has to state the conduct category and the affected transactions clearly enough to be challenged.
Checking a strategy before you buy
- Read the conduct or prohibited-practices section of the terms, not only the rules summary.
- Search the terms for the words that describe your method: martingale, grid, arbitrage, HFT, copy, hedge, EA.
- If you automate, check order-rate limits and whether purchased or third-party bots are treated differently from your own.
- Ask support in writing when a strategy sits near a line, and keep the answer.
- Test an automated strategy on a practice account before paying for an attempt; QATS offers a free API sandbox with virtual funds.
Frequently asked questions
01Is martingale allowed at prop firms?
Some firms restrict martingale or position doubling and others leave it to the loss limits. The current QATS terms do not name it as a prohibited category, but a doubling run reaches the daily and maximum loss limits quickly.
02Do prop firms allow HFT?
Several firms we compare ban high-frequency trading or HFT bots, including HyroTrader, Crypto Fund Trader, Blue Guardian, Goat Funded Trader, Apex Trader Funding and Topstep. QATS does not name HFT as a prohibited category; it publishes order-rate and API limits, and a burst of commands beyond them is refused.
03Can someone else trade my prop firm account?
At most firms, no: the evaluation is of the account holder. The QATS terms say your trader area and API credentials must not be sold, lent, shared or operated by anyone else.
04What happens if I use a prohibited strategy?
Depending on the firm, the attempt can be failed, trades excluded or a payout denied. On QATS, any action has to be supported by evidence and proportionate, and the decision names the conduct category.
Educational content, not investment advice. QATS evaluations and initial funded accounts are simulated; payouts depend on eligibility, verification and the applicable agreement.