Prohibited Forex Strategies

As in any business, Forex trading has its own rules, which are set by brokerage companies, allowing or prohibiting certain trading strategies.

It would seem that it makes no difference to the broker what method the client trades, because in any case, a commission is paid on each transaction.

But as it turns out, there is a difference and most brokers have restrictions on some trading options.

These restrictions are always specified in the client agreement, which you must read before you start making transactions.

Therefore, when choosing a broker, it would not be superfluous to check whether the Forex strategy you are going to use is prohibited.

The most common prohibited strategies

It has already become so that brokerage companies traditionally do not allow the following trading options:

• Scalping – and especially pipsovka, that is, making short-term transactions lasting less than a few minutes. Moreover, often the strategy is not directly prohibited; the agreement simply limits the minimum duration of the transaction, for example, at least 5 minutes.

Brokers that allow scalping - http://time-forex.com/brokery-dly-skalpinga

• Automatic trading – if the robot makes a large number of transactions during one session. A limit is introduced on the number of transactions during a day or one session, for example, no more than 100.

• Hedging is the simultaneous opening of transactions in the opposite direction on one asset. It is not clear why the seemingly harmless Forex trading strategy was not acceptable, but often it is prohibited.

• Earnings on swaps - the essence of it is that a trader opens two accounts with different brokers, with one of the accounts being Islamic (exempt from paying swaps), after which transactions 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.

Officially, this strategy is not prohibited, but brokers have a negative attitude towards such clients, since they rarely open new transactions and, accordingly, bring little profit.

It should be noted that these strategies can only be called prohibited conditionally, since they are not prohibited by all brokers; just before you start using a tactic or strategy, you need to check again about the possibility of using it in the broker’s support.