Are Funded Trader Rules Fair? Banned Practices in 2025
As funded trading grows in popularity, many traders are discovering that these programs come with strict rules—not just about performance, but also behaviour. Proprietary trading firms and the brokers they work with enforce policies designed to ensure fairness, manage risk, and preserve business integrity. But are these rules fair to traders? And where do they cross the line from risk control to unreasonable restriction?
In this article, we’ll explore the most common prohibited practices in funded trader programs and evaluate whether these restrictions benefit or disadvantage traders.
The Most Common Prohibited Practices in Funded Trading
- Gambling and Overleveraging
Firms define gambling as risking more than 3% of your account on a single trade idea. Overleveraging refers to trading above the allowed lot size limit. For example, on a $100,000 challenge account, exceeding 40 lots across FX pairs (e.g., 20 lots on EURUSD and 20.5 on GBPUSD) would violate the rule.
These rules aim to prevent reckless trading and large drawdowns that firms cannot offset. They are arguably fair designed to promote sustainable trading practices.
- Major News Trading Restrictions
Trading within 4 minutes before or after a major news release is often prohibited. This is because news-driven volatility can result in price spikes, slippage, and execution risks that distort a trader’s actual performance.
While some may view this as limiting, it’s a reasonable safeguard—especially for firms using demo environments to simulate real markets. Some programs allow this with a paid add-on, giving traders flexibility.
- Copy Trading Between Unrelated Accounts
Using identical strategies or third-party signals to mirror trades across unrelated accounts is restricted. Firms want to ensure each trader demonstrates independent skill.
This rule protects the integrity of the evaluation and avoids the risk of account manipulation. Copying between your own accounts, however, is typically allowed.
- Public Expert Advisors (EAs)
Public or shared EAs—especially those downloaded from forums—are banned. These systems often create trade clusters that mimic account management or exploit inefficiencies.
Firms favour custom or private systems to ensure uniqueness and reduce platform abuse. If you use EAs, ensure they are proprietary.
- Reverse Trading and Group Hedging
Reverse trading occurs when a trader opens opposing positions across multiple accounts to neutralize risk. Group hedging involves coordinated trades between individuals to achieve the same effect.
Both practices misrepresent risk and undermine the purpose of evaluation. Their prohibition is widely accepted as fair.
- Group Copying and Account Management
Using the same EA with identical settings across accounts, or having someone else manage your account, violates KYC/AML rules. This practice hides the true trader identity and undermines credibility.
Firms rightly enforce these rules to comply with regulatory standards and maintain ethical trading environments.
- Account Churning (Rolling)
Constantly failing funded accounts, then opening new ones rapidly, is known as churning. It’s a red flag for gambling behavior and violates the spirit of funded trading.
Limiting this behavior is reasonable—it pushes traders to grow sustainably, not recklessly.
- Exploiting Platform Glitches or Latency
Using bugs, price feed errors, or latency exploits (e.g., arbitrage, tick scalping, server delays) is strictly prohibited.
These are technical hacks, not trading strategies. All legitimate firms ban these practices, and traders exploiting them often get banned outright.
Are These Rules Fair?
Most of these rules are justified. Funded firms must balance trader freedom with business sustainability. Without controls, firms would face platform abuse, unmanageable risk, and credibility loss.
However, transparency is key. Traders should be given clear rulebooks, risk parameters, and access to appeals. Some firms apply these rules inconsistently or retroactively—this is where fairness breaks down.
How to Protect Yourself as a Trader
- Read the rulebook thoroughly before starting
- Avoid public EAs or copying others’ trades
- Practice strict risk and trade management
- Avoid news scalping unless permitted
- Get certified to improve your skill and credibility
The CFT: Certified Funded Trader Certificate by FundedTrader.Ai teaches compliant, sustainable trading practices. It helps you pass challenges and avoid accidental rule violations.
Final Thoughts
While funded trading firms impose tight restrictions, most are grounded in sound risk management. Traders who treat funded accounts as real capital and respect the rules tend to thrive.
To increase your chances of getting funded and staying funded, combine discipline, education, and a clear understanding of what’s allowed.
Start with the CFT Certificate from FundedTrader.Ai to trade smarter and safer.