NOTE: The following takes effect from August 13th 2024, 00:00 CET
1. Hedging between two or more different accounts.
Hedging the same financial instrument across different trading accounts is strictly prohibited.
If our system detects this for the first time, whether it is during Phase 1, Phase 2, or in a Funded Account, your accounts will receive a Soft Breach. This means your accounts will not be permanently closed on the first detection. Additionally, you will receive a warning email, and all your trades will be closed, regardless of whether they are in profit or loss.
Important: Please note that this Soft Breach is a one-time warning per user. This means that after a user receives the initial warning email, any subsequent Hedge violation will result in a Hard Breach.
If our system detects hedging for a second time, the involved accounts will be permanently breached and closed.
This policy ensures that traders use their own trading skills and do not attempt to exploit our services.
Example:
A trader has two trading accounts, Account A and Account B, and decides to hedge the EUR/USD pair by buying 1 lot of EUR/USD in Account A and selling 1 lot of EUR/USD in Account B.
First Detection: When our system detects this hedging activity for the first time, whether the accounts are in Phase 1, Phase 2, or are Funded Accounts, the involved accounts will receive a Soft Breach. The trader will receive a warning email, and all open trades in both accounts will be closed, whether they are in profit or loss. However, the accounts will not be permanently closed at this stage.
Second Detection: If the trader repeats this hedging activity, buying and selling the same instrument in different accounts, our system will detect it again. This time, the involved accounts will be permanently breached and closed.
2. Hedging within the same account.
Hedging the same financial instrument within the same trading account is permitted. Traders are allowed to place both buy and sell positions for the same instrument within the same account to manage their risk.
Example:
A trader has a single trading account and decides to hedge their position in EUR/USD. The trader buys 1 lot of EUR/USD at 1.1000. Later, to manage potential downside risk, the trader sells 1 lot of EUR/USD at 1.1050 within the same account.
By having both buy and sell positions open for EUR/USD in the same account, the trader can effectively manage risk and lock in potential profits or limit losses.
This practice of hedging in the same trading account is allowed and aligns with the firm’s risk management policies.
3. Hedging Between Different Prop Firms
Hedging between different prop firms is strictly prohibited.
Example:
Imagine a trader has accounts with two different prop firms—Account A with BrightFunded and Account B with Firm Y. The trader buys 1 lot of BTC/USD on Account A and simultaneously sells 1 lot of BTC/USD on Account B. This hedging strategy ensures that no matter how the market moves, one account will profit while the other incurs a loss.
The trader might then close the profitable account before the evaluation period ends, helping them meet performance targets or pass challenges based on the account that shows a profit. This manipulation does not reflect the trader’s true skill or market risk management abilities.
By engaging in hedging across different prop firms, the trader avoids genuine market risk and creates a distorted view of their trading performance. This practice undermines the fairness of the evaluation process and gives the trader an unfair advantage over others who adhere to the rules and trade based on their own strategies.