Prop Number One requires that the average duration of all trades exceeds 1 minute. This policy was introduced to ensure a stable and transparent trading environment, counteracting potential practices of HFT and Tick Scalping.
Context and Objectives
The primary purpose of the One Minute Rule is twofold:
Mitigate the risks associated with tick scalping: Very short-duration trades, typical of tick scalping, can expose the platform to high risks and negatively impact the price feed.
Promote a balanced trading environment: Ensure that traders adopt sustainable strategies and do not engage in high-frequency practices that could compromise the integrity of the market.
Requirements and Limitations
To ensure compliance with the One Minute Rule, traders must observe the following criteria:
Average trade duration: The majority of trades, and in particular the overall average duration, must exceed 1 minute.
Exceptional trades: It is accepted that there may occasionally be trades with a duration of less than 1 minute; however, these must remain exceptional and not impact the overall average value.
Monitoring: Traders can check their performance data through the dashboard, on the "account metrics" page and within the "insights" tab.
Prohibited Activities
Prop Number One is committed to preventing behaviors that could compromise ethical trading and the integrity of the system. In particular:
Tick Scalping: Strategies that consist of extremely rapid trades, aimed at manipulating the price feed, are discouraged.
High Frequency Trading: The excessive use of very short-duration trades, which could lead to a decrease in the overall average duration, is considered in conflict with the required criteria.
Control and Sanctions Mechanism
To detect violations, Prop Number One uses an automated reporting system that:
Identifies trades that mirror those of other traders.
If a violation is reported, the affected account is manually reviewed.
If the review confirms a violation:
Prop Number One reserves the right to immediately terminate all associated accounts.
Traders may receive a formal warning or face immediate platform closure, depending on the severity of the case.
What happens if I am notified about One Minute Trading?
You can consult the parameters and consequences of the violation in detail at this link: https://faq.propnumberone.com/en/articles/10624718-risk-controls-for-one-minute-trading
Impact and Benefits
Implementing the One Minute Rule brings numerous benefits:
Price Feed Integrity: By reducing the risk of manipulation, a reliable price feed is ensured for all users.
Market Stability: An environment free from aggressive practices fosters greater stability and trust in the system.
Trading Fairness: By promoting sustainable trading strategies, it helps create a level playing field for all traders.
Conclusions
The One Minute Rule was designed to protect the fairness and integrity of trading on Prop Number One.
By requiring that the average duration of trades exceed 1 minute, the platform is committed to combating tick scalping and high-frequency trading practices, thus ensuring a healthy, transparent and competitive trading environment.
Traders are encouraged to regularly monitor their metrics via the "account metrics" panel and adjust their strategies to ensure compliance with the criteria, thus helping to maintain the integrity of the entire platform.