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Prohibited trading strategies that violate our Terms of Use
Prohibited trading strategies that violate our Terms of Use

Restrictions to trading strategies that violate Rocket 21's Terms of Use policy

Updated over 9 months ago

Welcome!

We don't limit your trading style or strategy you choose to use. However, we do not tolerate any cheating or abuse of the simulated (demo) environment as it violates our Terms of Use.

We do not allow cheating.

Strategies that are considered "cheating" or not representative of real market conditions are not allowed and will result in a violation of our Terms of Use. Strategies that generate risk-free consistent profits only in a demo environment are not permitted as they cannot be replicated. Any use of such strategies will lead to account closure.

Furthermore, account management by a third party, such as "pass your challenge" or copy trading services is strictly prohibited and will result in the rejection of the accounts and a permanent ban from all Rocket 21 services.

Any account, no matter the phase, may potentially become subject to an internal statistical review of trading data, activity, trends and other account data at any time. Without excluding the above, payout requests, as well as all customer trading and KYC/CIP data associated with the customer and any relevant accounts, and data that is otherwise identified by our anomaly detection systems are subject to review. These analyses are performed using indicators designed to identify potential violations of our terms of use, customer agreement or trading practices that are not actionable in live market scenarios. Please review all materials within this article for additional information, illustrating some of the non-actionable trading data scenarios and violations. Based on these reviews, Rocket 21 may in its sole discretion initiate one or more of the following actions:

  • Disqualification of your Challenge and/or;

  • Reduction of simulated profit and/or;

  • Warnings issued and/or;

  • Disabling of Accounts and/or;

  • Rejection of payout requests and/or;

  • Termination of active accounts and/or;

  • Suspension of the services offered by Rocket 21.

If a review of the indicators and data referenced herein indicates with reasonable confidence, in Rocket 21’s sole determination, that a violation or prohibited activity has occurred, including but not limited to the behaviors, trends, or indicators used by Rocket 21 to identify violations, Rocket 21 exercises its right to engage without prior notice one or more of the actions bulleted above, in accordance with our customer agreement and Terms of Use.

Prohibited Strategies

Using any of these strategies will result in the breach of the account and possibly being banned from our platform.

  • High-Frequency Trading (HFT)

High-Frequency Trading (HFT) is a trading strategy that utilizes advanced computer algorithms and high-speed telecommunications networks to execute large numbers of trades in a fraction of a second. However, HFT is prohibited as it can lead to market manipulation, create unfair advantages, and cause instability in the market.

On our platform, we expect all traders to use our services in a fair and honest manner and to adhere to all laws, regulations, and our Terms of Use.

  • ​Grid Trading

Grid trading is a prohibited trading strategy due to the potential risks it poses. It involves placing inverse buy and sell orders of the same instrument with the same or similar risk, which can lead to market manipulation, over-leveraging, market instability and a potential risk-free profit. To avoid large drawdowns and over-leveraging, it is essential to have a well-defined risk management strategy in place.

  • Account Sharing or Account Sale

Account sharing or account sales is the act of sharing or selling funded accounts from one person to another. This goes against our Terms of Services and will result in being banned from Rocket 21.

  • Martingale Trading

Rocket 21's Terms of Use prohibit the use of Martingale as a trading strategy. Martingale is a strategy based on increasing the size of the investment after each loss, with the expectation that a winning trade will recoup all previous losses and produce a profit. This type of activity is considered gambling and is extremely risky as it can lead to substantial drawdowns and the simulated loss of all capital.

It is essential to have a clear risk management strategy in place and to avoid investing all of one's capital in a single trade.

  • Collusion Between Users

An individual or group of individuals may engage in a trading strategy known as cross-account trading or collusion. This involves opening multiple accounts within a financial institution and placing trades in the same direction (i.e., buying or selling on the same asset across all accounts). This practice is considered a form of market manipulation.

  • Hedging or Group Hedging Across Multiple Accounts

An individual or group of individuals can employ a trading strategy where they open multiple accounts with a financial institution and place trades in opposite directions (i.e., buy and sell) on the same asset across all accounts called hedging or group hedging. In a real market, this would yield no profit as the positions are hedged in both directions. However, when trading with a prop firm, one account could generate a loss for the firm while the other account could generate a profit, resulting in risk-free profits. The use of this strategy is not allowed and will result in a ban from Rocket 21 and its services.

  • Use of a Delayed Data Feed

The use of a data feed that has a delay or lag in delivering market data, such as stock prices or trading volumes, gives a trader an unfair advantage over other traders who must use real-time market data. This is considered unethical and is not allowed in the real financial market.

  • Trading on Delayed Charts

Trading on charts with a delay or lag in their updates is considered unethical and is not in line with the operations of the real financial market.

  • Use of guarantee of compliance with limit orders (including take profit and stop loss)

The use of a guarantee of compliance with limit orders, such as take profit and stop loss, is prohibited. This is because it can be used to circumvent regulatory restrictions and manipulate the market. Such abuse is enabled by the nature of trading on a simulated platform. Traders may be able to avoid the fills they would have received in the real market, making this strategy non-compliant with the operations of the real financial market.

Trading Activity: Soft Breaches/Warnings

The following are examples of trading behaviors and activities that will result in soft breaches and warnings that can escalate to the breach of your accounts and possible ban from Rocket 21 and its services.

  • Use of Platform or Data Freezing Due to a Demo Server Error

The use of platform or data freezing due to a demo server error that can lead to unfair advantages and misleads the traders.

If we experience server issues that prevent you from closing trades for stop loss or take profit, we'll see it in our logs and work with affected traders to resolve the issue. To help us address any freezing issues, please take screenshots or screen recordings. If you try to abuse the platform due to a demo server error, this will result in a possible permanent ban from Rocket 21 and its services.

  • Simulated News Trading

Simulated news trading is a strategy used by traders to capitalize on the market's response to economic or political news and events. This could include interest rate decisions, GDP reports, and political announcements. However, news trading can be risky as the market's reaction to news events is often unpredictable and could potentially lead to significant losses.

  • Order Layering

Order Layering: Trading tactic whereby clients intentionally fragment positions into numerous smaller trades executed concurrently. The primary objective of this approach is to alleviate slippage amid simulated market conditions by minimizing the "static slippage associated with the size of the order."

In simulated trading settings, such as those provided by our Rocket 21, order layering can be perceived as advantageous due to the absence of genuine liquidity consumption. Unlike in live markets, where each order absorbs liquidity from the order book, simulated orders lack a corresponding counterparty, enabling them to be repeatedly filled against the same book without requisite slippage adjustments.

Therefore, it is crucial to emphasize that order layering is strictly prohibited on our platform. Customers discovered employing this exploitative strategy may face disciplinary measures, including the forfeiture of profits accrued from stratified orders. These gains will be subtracted from payouts, and if this leads to a breach of any terms of service or trading policies, the customer will be held accountable.

Conclusion

To mitigate this risk, Rocket 21 has certain restrictions for Simulated Funded Accounts when trading during significant macroeconomic reports. This includes not being filled at an unrealistic price due to the volatility of the event.

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