At CoveFunded, certain trading strategies are explicitly forbidden to ensure fair play and to maintain the integrity of their trading environment. The prohibited strategies include:

• Use of Trading Robots or Expert Advisors (EAs): Automated trading tools like bots or EAs are strictly prohibited. This rule is in place to prevent any unfair advantage and to ensure that all trading decisions are made by the trader in real-time.

• High-Risk Trading Practices: Strategies that involve using an account’s full margin on single positions or engaging in excessively high-risk trading behavior are not allowed. This is part of CoveFunded’s commitment to promoting sustainable trading practices.

• News Trading: Trading during major economic news releases is often restricted. This is because the high volatility during such events can lead to price slippage and other issues that may result in unfair trading conditions. Many prop firms, including CoveFunded, typically have rules against opening or closing positions right before or after significant news announcements.

• Arbitrage: This strategy involves taking advantage of price differences between two or more markets or instruments. Since this method often relies on latency and execution speed rather than market insight or trading skill, it is generally prohibited to ensure that all traders are competing on a level playing field.

• Grid and Martingale Strategies: These strategies involve placing multiple orders at different levels, often increasing the size of trades as prices move against the position. Such methods are considered high-risk and are typically not allowed because they can lead to significant drawdowns, violating the firm’s risk management principles.

• Latency Arbitrage: This is a form of arbitrage that exploits delays in price updates between different platforms. Since latency arbitrage doesn’t reflect true market conditions and relies on execution speed rather than analysis or strategy, CoveFunded prohibits this practice to maintain fairness.

• Hedging Between Accounts: While hedging within a single account might be allowed under certain conditions, hedging between multiple funded accounts (either within CoveFunded or across different firms) is not permitted. This is to prevent traders from manipulating risk levels or circumventing account-specific rules.

• High-Frequency Trading (HFT): While not universally banned, CoveFunded places strict limits on trading frequency. High-frequency trading strategies, which involve making numerous trades within a short period, may be restricted or closely monitored to ensure they comply with the firm’s rules on trade execution and risk management.

• Misleading Account Activity: Any attempts to mislead the firm about account activity, such as using multiple accounts to generate artificial trading volume or misrepresenting trading results, are strictly prohibited. This also includes attempting to hide or obscure violations of the trading rules through complex strategies or account structures.
• Copy Trading: Similar to account copying, using services that allow for copying another trader’s trades in real-time is not allowed. This rule ensures that each trader’s performance is a result of their own analysis and decisions, not merely a replication of someone else’s strategy.