PROHIBITED STRATEGIES

The Prop Pit prohibits trading behavior that exploits system mechanics or produces payout results through unsustainable risk. Legitimate scaling, staged entries, and DCA are allowed, but accounts may still be reviewed if risk behavior becomes abusive or inconsistent with the intended use of the platform.

Hedging

Hedging is not permitted. You may not hold opposing positions in the same or correlated instruments on any Prop Pit account.

• You may not hold simultaneous long and short positions in the same instrument.
• Cross-instrument hedging (e.g., ES vs NQ, stock vs option) is not permitted.
• Hedging across multiple Prop Pit accounts is not allowed. Each account must be traded independently with its own directional strategy.

DCA & Scaling In

DCA, scaling into positions, and using staged orders are allowed. A trader may add to a position, work a breakout with resting orders, or improve an entry as part of a genuine trading plan.

• Adding to a position is not automatically a violation.
• Using staggered orders to scale into a thesis-driven trade is allowed.
• DCA may not be used as a trader's main strategy if it repeatedly produces poor risk-to-reward behavior.

Negative Risk-to-Reward Trading

Accounts may be rejected if 30% or more of total trade profits come from trades with a negative RR of 3:1 or higher.

• Put simply: you cannot regularly risk $4 or more to make $1.
• Example: if a trade goes $400 into drawdown before closing for a $100 win, that trade violates the standard.
• Normal day-to-day traders are unlikely to be affected unless this becomes a recurring pattern and a material source of profits.

News Straddling

Placing opposing pending orders (buy stop + sell stop) around the current price immediately before a high-impact news release — commonly called a "news straddle" — is prohibited. Standard discretionary news trading is allowed, but bracketing a release solely to capture the volatility spike is not.

Latency Arbitrage

Latency arbitrage — exploiting price feed delays between brokers or platforms to trade on stale quotes — is strictly prohibited. This includes:

• Using a faster data feed to front-run the Pit Trader platform price.
• Exploiting known latency windows during server updates or market opens.
• Any strategy that depends on execution speed advantages rather than market analysis.

Third-Party Signal & Copy Services

Using third-party signal providers or copy-trade services where you do not control the trading decisions is not permitted. Your account must reflect your own trading.

• Subscribing to a signal service that auto-executes trades on your behalf is not allowed.
• Copying trades from another trader's account (outside of The Prop Pit's own copy-trading feature) is prohibited.
• You may use educational signal groups for idea generation — as long as you place and manage the trades yourself.

High-Frequency Trading (HFT)

High-frequency trading strategies that rely on sub-second execution speed, co-location advantages, or algorithmic order-flow manipulation are not allowed. This includes:

• Strategies executing hundreds or thousands of trades per session at sub-second intervals.
• Quote stuffing, layering, or spoofing.
• Any system designed to exploit order-book microstructure rather than directional price movement.

Consequences of Violations

• First detection triggers an automatic account review.
• Confirmed violations may result in profit forfeiture, account suspension, or permanent breach.
• Repeat offenders risk being banned from all future Prop Pit accounts.