What trading strategies are allowed?

Modified on Sat, 7 Jun at 1:09 AM

In the trading world, various strategies are employed by traders to capitalize on market movements. Understanding which strategies are allowed and which are prohibited is essential to ensure that your approach aligns with Pivex’s rules and ensures a successful evaluation.

Below is a breakdown of the allowed and prohibited strategies to help guide your trading approach during both the Trading Challenge and Pivex Traders stages.

Strategy	Allowed?	Notes	How to Avoid Violating Rules
Scalping	✅ Allowed	Scalping involves making small, quick profits from minor price changes in a short period.	Scaling is allowed, but ultra-fast scalping (within seconds) and tick scalping (where a tick scalper uses automated trading algorithms to scalp ticks on instruments) are prohibited.
News Trading	⚠️ Allowed	Trading based on major news events or economic reports. Profits from high-impact news may be excluded.	Avoid focusing your entire strategy on news-driven volatility and remember that profits from such events may be excluded from the challenge.
Swing Trading	✅ Allowed	Swing trading involves holding positions for several days or weeks to profit from medium-term trends.	This strategy is allowed. Focus on identifying market trends and using proper risk management while holding positions for a longer period.
Ultra-Fast Scalping	❌ Not allowed	Trading with extremely short holding periods (milliseconds to seconds) using automated systems.	1. Do not use algorithms or bots for rapid-fire trades. 2. Execute trades manually with clear strategic intent.
HFT (High-Frequency Trading)	❌ Not allowed	Making a large number of trades within a short period to exploit minor price changes.	Avoid using automated trading systems that place trades based on high-speed algorithms. Focus on manual, analytical trading.
Hedging	❌ Not allowed	Hedging refers to placing opposing long and short orders on the same asset to mitigate potential losses.	This strategy is prohibited as it does not align with evaluating consistent market exposure. Focus on trades that follow one direction based on analysis.
Grid Trading	❌ Not allowed	Opening multiple buy and sell orders at fixed intervals to capture price fluctuations.	Grid trading is prohibited as it creates positions without considering market trends, which leads to inconsistency. Stick to systematic strategies based on market analysis.
Martingale	❌ Not allowed	A strategy where you double your trade size after each loss to recover previous losses.	Martingale can quickly deplete your capital by increasing risk. Focus on controlled risk management and avoid doubling down after a loss.
HFT (High-Frequency Trading)	❌ Not allowed	HFT involves making numerous trades in a short time frame, taking advantage of tiny price movements.	This strategy is prohibited as it is based on speed and automated systems, rather than market analysis. Instead, focus on deliberate, well-planned trades with clear analysis.
Copy Trading	❌ Not allowed	Automatically replicating the trades of another trader or signal provider.	Develop your own trading strategy. Avoid subscribing to external signals or copying other traders’ positions.
Stack Trading	❌ Not allowed	Opening multiple identical orders in the same direction without closing previous positions, effectively layering trades to increase exposure.	Open one position per strategy and manage it independently before opening new trades in the same direction.
EAs/Bots	❌ Not allowed	Using automated systems or bots for executing trades.	All trades must be manually executed. Rely on your analysis, and don’t depend on automated systems to make decisions for you.
Overleveraging	❌ Not allowed	Using excessive leverage to control larger positions than your account balance can handle.	Trader A has a $10,000 account and uses 30:1 leverage to control a $300,000 position. They enter a trade with high expectations, but the market moves against them by just 3%. As a result, the trader loses $9,000, which is almost the entire value of their account. This trade was overleveraged, and the large loss occurred due to the excessive position size relative to their account.

Why These Rules Matter
Understanding these strategies and how to work within the established guidelines is crucial for success in the Trading Challenge. At Pivex, we emphasize consistency and responsible risk management rather than relying on high-risk strategies that exploit market volatility. Avoiding prohibited strategies ensures that your trading reflects genuine skill and decision-making, ultimately allowing you to progress to the Traders Stage at Pivex with real payouts.

By adhering to these rules, you demonstrate your ability to handle real market situations responsibly, which is key to becoming a successful trader at Pivex.