TL;DR: Tick scalping is not allowed at FundedNext. While general scalping is permitted, strategies involving excessive microsecond trades for small price movements (tick scalping) are restricted due to their potential to manipulate the market and disrupt liquidity.
What is Tick Scalping?
Tick scalping is a highly aggressive trading technique where traders aim to profit from extremely small price movements, often just a few ticks, by executing a large volume of trades within milliseconds to seconds. These trades are typically automated through high-speed algorithms or bots that rapidly open and close positions to take advantage of market inefficiencies.
While scalping as a strategy is allowed at FundedNext, tick scalping is strictly prohibited due to the following reasons:
Why Tick Scalping is Restricted at FundedNext:
Market Manipulation Risk:
Tick scalpers may use ultra-fast execution to "front-run" other traders, which creates an unfair advantage and manipulates order flow.
Liquidity Disruption:
Rapid order entries and cancellations can strain the liquidity of the market, making it harder for other traders to enter or exit positions fairly.
Unnatural Trade Activity:
The nature of tick scalping can generate an excessive number of trades, which may mislead market behavior and overwhelm server resources.
Example of Tick Scalping:
A trader using a bot places hundreds of trades per hour on instruments like EURUSD or XAUUSD, each aiming to profit a single pip or less. These trades flood the system, create phantom demand, and destabilize pricing, directly violating FundedNext’s trading ethics.
FundedNext Policy About Tick Scalping:
FundedNext continuously monitors for tick scalping behavior. If a trader is identified using such a strategy:
Tick scalping violations result in immediate account termination without prior warning.
The system may automatically flag and restrict accounts showing such patterns.
What is Allowed Instead of Tick Scalping?
Normal Scalping:
Traders can still use fast strategies within reasonable frequency and with proper stop loss and take profit logic.
Manual or Semi-Automated Trading:
Strategies involving human decision-making or risk-managed bots are acceptable.