No, hedging and Martingale strategies are not allowed. Any attempt to use these strategies will be considered a violation of our trading policies and may result in account suspension or cancellation. Traders are expected to adhere to the established rules to ensure a fair and responsible trading environment.
What is considered hedging and Martingale?
- Hedging Strategies
Definition:
Hedging in forex involves opening opposing positions simultaneously to protect against adverse market movements.
Example:
A trader opens a long position (buy) on EUR/USD anticipating an upward movement but simultaneously opens a short position (sell) on the same pair to limit potential losses if the market moves against the initial trade.
Why it's restricted:
Hedging can manipulate market exposure and distort risk management practices. It undermines the principles of transparent trading and accountability.
- Martingale Strategies
Definition:
The Martingale strategy involves doubling the trade size after a loss, aiming to recover previous losses and achieve a profit once a winning trade occurs.
Example:
A trader starts with a $10 trade and, after a loss, doubles the trade size to $20. If another loss occurs, the next trade size increases to $40, and so on, until a winning trade recovers all prior losses plus a small profit.
Why it's restricted:
Martingale strategies can lead to excessive risk-taking and significant losses, particularly in volatile markets. They rely on the assumption of unlimited capital and do not align with responsible trading practices.
