Prop Number One specifically prohibits all Latency Trading, Arbitrage and HFT activities to ensure a stable and transparent trading environment.
Background and Objectives
The primary objective of this rule is twofold:
Mitigate the risks associated with tick scalping: Very short-duration trades, typical of tick scalping and HFT, 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 may compromise the integrity of the market.
Prohibited Activities
Prop Number One is committed to preventing behaviors that may 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.
HFT: The excessive use of very short-duration trades, which may lead to a decrease in the overall average duration, is considered in breach of the required criteria.
Latency Trading: The excessive use of fast feeds to open zero-risk trades.
Control Mechanism and Sanctions
To detect any violations, Prop Number One uses an automated reporting system that:
Identifies trades that mirror those of other traders.
If a report is made, 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 warned about Latency Trading, Arbitrage and HFT?
You can read the detailed parameters and consequences of the violation at this link: https://faq.propnumberone.com/en/articles/10626464-risk-control-for-latency-trading-arbitrage-and-hft
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 guaranteed for all users.
Market Stability: An environment free of 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
This rule was designed to protect the fairness and integrity of trading on Prop Number One.
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.