Guidelines Regarding Trading Strategies Contrary to ThinkCapital's Terms of Use Policy

Understanding of Trading Strategies comply with ThinkCapital's Terms of Use to avoid violations

Overview

Welcome to ThinkCapital’s FAQ Section on Prohibited Trading Strategies.

At ThinkCapital, we are committed to fostering a fair and transparent trading environment for all users in alignment with our Terms of Use. We highly value diversity in trading styles, strategies, and statistical approaches employed by our traders. However, it is imperative to understand that any form of cheating, fraudulent activities, or exploitation of our simulated trading environment is strictly forbidden and constitutes a violation of our Terms of Use.

Engaging in such behaviors may result in various consequences, including warnings, temporary account suspensions, or permanent termination of the account. We emphasize the gravity of this issue and urge all our members to familiarize themselves thoroughly with our Terms of Use to avoid any inadvertent breaches.

Our Commitment to Empowering Traders

At ThinkCapital, our core mission is to empower traders to derive actionable insights from their trading endeavors. Central to our ethos is the collection of genuine, practical trading data, gauged through meticulous risk assessments and metrics, with the potential for replication in real market conditions. If we find at any time that your trading behavior and strategy are not replicable with real market conditions, we reserve the right to audit your account, strategy, and execution, and may suspend your account.

Strict Enforcement Against Prohibited Activities

It is imperative to adhere to our guidelines regarding prohibited trading strategies. Any trading styles considered as “cheating” or deviating from real-market conditions are strictly forbidden and will result in a violation of our Terms of Use.

Specifically, strategies aimed at generating risk-free, consistent simulated profits solely on demo accounts are not permitted. Funded Traders are expected to trade on their accounts as they would on live accounts, and any exploitation of demo accounts will lead to the closure of the trader’s account, regardless of phase.

ThinkCapital maintains a strict stance against activities deemed as violations or prohibited behaviors, including practices resembling “gambling,” “punting,” or “account churning.” In the event of a confirmed violation, we reserve the right to implement appropriate actions without prior notice, as outlined in our customer agreement and Terms of Use.

Furthermore, the use of account management, “pass your challenge,” or copy trading services is strictly prohibited. Engaging in such activities will result in the rejection of Simulated Funded Accounts and a permanent ban from all ThinkCapital services.

We reiterate our commitment to facilitating the creation of actionable trading data and maintaining a fair trading environment for all our users.

Routine Account Reviews

All accounts, irrespective of phase, are subject to routine internal statistical reviews encompassing trading activity, behavior patterns, and account data. This review process, including funded account payout requests and associated customer data, is conducted to ensure compliance with our Terms of Use and customer agreement.

Any deviations or anomalies identified during these reviews may prompt one or more actions at ThinkCapital’s discretion, including challenge disqualification, profit deductions, warnings, account suspensions, payout denials or delays, account termination, or suspension of services.

Example Strategies Violating Our Trading Guidelines

Copy Trading

Copy trading, also known as mirror trading or social trading, is a practice in the financial markets where traders automatically (or manually) replicate the trades of other traders, typically more experienced ones. Essentially, it allows less experienced traders to mimic the trading strategies and actions of more successful traders in real-time and is also prohibited on ThinkCapital. Please remember all trades taken on any ThinkCapital account must be that of the trader’s own idea and execution.

Grid (Reverse) Trading

Grid trading involves placing inverse buy and sell orders of the same instrument with similar risk levels. This strategy can lead to market manipulation, over-leveraging, and instability, potentially resulting in risk-free simulated profits. At ThinkCapital, we stress the importance of robust risk management to mitigate large simulated drawdowns and over-leveraging. Therefore, grid trading is strictly prohibited as it undermines our trading environment’s integrity.

Hedging or Group Hedging Across Multiple Accounts

Hedging or group hedging across multiple accounts to exploit price movements without market risk is not allowed at ThinkCapital. This behavior violates market principles and our Terms of Use.

Collusion Between Users

Collusion between users, involving coordinated trading across multiple accounts to manipulate markets, is strictly prohibited and will lead to account termination.

Account Sharing, Account Management, or Account Sale

Traders are prohibited from sharing or reselling Simulated Funded Accounts to other owners. Such activities breach our Terms of Use and will lead to immediate account termination and service bans.

Latency Arbitrage

Latency arbitrage is a trading strategy where traders exploit differences in the time it takes for information to travel between trading venues. By capitalizing on these delays, traders aim to gain an advantage in executing trades, potentially disrupting market integrity and fairness. At ThinkCapital, we prohibit latency arbitrage as it undermines the principles of fair and transparent trading. We are committed to maintaining a level playing field for all traders on our platform.

High-Frequency Trading (HFT)

Usage of HFT algorithms, bots, or Expert Advisors (EA) is strictly prohibited at ThinkCapital due to concerns regarding market manipulation and unfair advantages. Engaging in HFT activities violates our Terms of Use and will result in account termination.

Abuse of a Delayed Data Feed

Using a delayed data feed provides unfair advantages and is not in compliance with real-market operations. Therefore, it is prohibited at ThinkCapital.

Abuse of the Simulated Environment

Clear abuse of the simulated environment includes executing large-volume trades without a logical strategy, neglecting market analysis and risk management. Such behavior undermines our mission of obtaining credible trading data and may result in warnings, trade limitations, or account suspension.

Trading on Delayed Charts

Trading on delayed charts distorts market perceptions and is inconsistent with real-market operations. This practice is strictly forbidden at ThinkCapital.

Utilization of Expert Advisors

The use of automated trading systems or Expert Advisors (EAs) on accounts where they are not allowed is prohibited at ThinkCapital. EAs can execute high-frequency or complex trading strategies without sufficient risk controls, potentially leading to unintended losses or disruptions to market stability. To ensure fair and transparent trading, we enforce strict guidelines regarding the use of EAs across our platform.

Challenge Passing Services

The prohibited utilization of challenge passing services involves traders using these services to circumvent regulatory requirements or gain entry to proprietary trading firms without demonstrating sufficient trading proficiency or risk management skills. At ThinkCapital, we strictly prohibit the misuse of challenge passing services as it undermines the integrity of our trading environment and the principles of fair competition. We are committed to maintaining a level playing field for all traders and ensuring that our platform fosters genuine skill development and responsible trading practices.

Martingale Trading

Martingale trading involves increasing investment size after each simulated loss, aiming to recover previous losses and generate profits. This strategy is akin to gambling, posing significant risks such as large simulated drawdowns and potential loss of simulated capital. Due to its high-risk nature and inconsistency with real-market operations, martingale trading is not permitted at ThinkCapital.

Use of Guarantee of Compliance with Limit Orders

The use of guarantee of compliance with limit orders is prohibited as it can manipulate market dynamics. This behavior undermines our commitment to fair trading practices and is strictly prohibited.

Trading in Sanctioned Countries

Traders are prohibited from logging in and placing orders in countries sanctioned by OFAC. Refer to our list of restricted countries for further details.

Trading Activity: Soft Breaches/Warnings

Here are examples of trading behaviors and activities that can lead to soft breaches and warnings, which may escalate to account breaches or bans from our community.

Use of Platform or Data Freezing Due to Technical Errors

It’s against our policies to use platform or data freezing due to technical errors as it can give traders unfair advantages and mislead them. Traders found engaging in such practices may lose access to our demo servers. If you encounter server issues causing delays in closing trades for stop loss or take profit, please document them with screenshots or screen recordings and report them promptly to ThinkCapital’s support team via email at [email protected].

News Trading

News trading involves leveraging market reactions to economic or political news and events, such as interest rate decisions, GDP reports, or political announcements. Due to the unpredictable nature of market reactions to news events, news trading can pose risks, leading to significant simulated losses. To maintain market stability and fairness, ThinkCapital imposes specific restrictions for Simulated Funded Accounts during significant macroeconomic events. For detailed information on these restrictions, please refer to our “News Trading Rule” article.

Order Layering

Order layering refers to a trading strategy where customers intentionally split positions into multiple smaller trades executed simultaneously. This strategy aims to mitigate simulated market slippage by reducing the “static slippage associated with the size of the order.”

In simulated trading environments like those provided by ThinkCapital, order layering may appear advantageous due to the absence of real liquidity consumption. Unlike live markets where each order consumes liquidity from the order book, simulated orders lack a corresponding counterparty, enabling them to be repeatedly filled against the same book without proper slippage adjustments.

Recognize that order layering constitutes an abusive practice within simulated trading environments. By repeatedly splitting positions into smaller trades, traders manipulate system mechanics to their advantage, distorting the intended simulation of real market conditions.

Traders found engaging in this abusive strategy may face disciplinary actions, including profit deductions from layered orders. Such deductions will be subtracted from payouts, and if this action breaches any terms of service or trading policies, the customer will be held responsible. Enforcing these policies ensures the integrity and fairness of our platform’s trading environment for all users.

Gambling/Punting

At ThinkCapital, we strictly prohibit the use of speculative or reckless trading behaviors resembling gambling. This includes making high-risk bets without proper analysis or risk management, which can lead to significant losses or wins. Our platform is designed for serious traders focused on prudent investment strategies, not for gambling purposes. We prioritize responsible trading practices to safeguard the interests of all our users.

If a trader is found to be engaging in gambling behavior on our platform, we reserve the right to take appropriate action to uphold the integrity of our trading environment. This may include issuing warnings, imposing trade limitations, suspending the account temporarily, or even banning the trader from our services. At ThinkCapital, we are committed to fostering a responsible and fair trading community where all participants can thrive with confidence. You can read more about our Gambling guideline here: https://www.thinkcapital.com/faqs/general-faqs/what-are-thinkcapitals-guidelines-regarding-gambling-or-reckless-trading-behavior-on-the-platform/

Closing Remarks

These are some of the most common strategies violating our trading rules at ThinkCapital. We constantly refine our statistical assessments and reviews to maintain a fair and transparent trading environment. Any strategy deemed inconsistent with real-market operations will be thoroughly investigated, and appropriate actions will be taken to uphold the integrity of our platform. Please bear in mind that while this list does not represent all possible strategies that would go against our trading rules, it gives you a solid foundation to understand which practices are permitted and which aren’t. Once again, it is imperative to understand that any form of cheating, fraudulent activities, or exploitation of our simulated trading environment is strictly forbidden and constitutes a violation of our Terms of Use