Prohibited Forex Strategies
As with any business, forex trading has its own rules, established by brokerage companies, allowing or prohibiting certain trading strategies.
It might seem like a broker wouldn't care which method a client uses, since a commission is paid on every trade.
But as it turns out, there are differences, and most brokers have restrictions on certain trading methods.
These restrictions are always spelled out in the client agreement, which you must read before trading.
Therefore, when choosing a broker, it's a good idea to check whether the forex strategy you plan to use is prohibited.
The most common prohibited strategies
It has become a tradition that brokerage companies do not traditionally allow such trading options:
Brokers that allow scalping - http://time-forex.com/brokery-dly-skalpinga
• Automated trading – when a robot makes a large number of trades during a single session, a limit is imposed on the number of trades per day or session, for example, no more than 100.
• Hedging – opening trades in opposite directions on the same asset simultaneously. It's unclear what's wrong with this seemingly harmless Forex trading strategy, but it's often prohibited.
• Making money on swaps – the essence of this is that a trader opens two accounts with different brokers, one of which is Islamic (exempt from swap payments), after which trades are opened on the same currency pair, but in different directions.
As a result, the trader receives a stable income in the form of a positive swap.
This strategy is not officially prohibited, but brokers have a negative attitude towards such clients, as they rarely open new trades and, accordingly, bring in little profit.
It should be noted that these strategies can only be called prohibited conditionally, since they are not prohibited by all brokers. Simply, before using a tactic or strategy, you should once again clarify the possibility of using it with the broker's support team.
