Prohibited Trading Practices & Enforcement Policy

At Pipstone Capital, we are committed to promoting responsible risk management and professional trading behavior. These rules apply to all account types, including 1-Step, 2-Step, and Instant accounts.

The following practices are strictly prohibited under our Responsible Trading Policy. Engaging in these behaviors may result in payout adjustment, payout denial, account breach, or permanent account closure.

To maintain fairness for both traders and the firm, Pipstone Capital applies a structured tolerance policy for trades executed with a duration of less than 60 seconds.

1st Occurrence

2nd Occurrence

3rd Occurrence

Repeated or intentional short-duration trading is considered non-compliant behavior.
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Purpose of the Enforcement Protocol

The above protocol is designed to allow traders to retain a portion of their profits despite identified violations, while protecting Pipstone Capital from prohibited trading practices and excessive risk exposure.

Rather than automatically denying payouts for initial violations, the structured deduction system provides traders with an opportunity to receive adjusted payouts while reinforcing responsible trading standards.

Repeated violations will result in progressively stricter enforcement, including permanent account termination.

Opening simultaneous buy and sell positions on the same instrument, or coordinating offsetting exposure across multiple related accounts, is strictly prohibited.

This includes:

• Cross-account hedging
• Coordinated multi-account exposure management
• Intentionally failing one account to benefit another
• Risk distribution across several accounts to increase payout probability

Each account must represent independent trading activity and standalone market risk.

Pipstone Capital does not permit trading behavior that resembles gambling, uncontrolled speculation, or unsustainable risk exposure.

Prohibited behavior includes:

• Excessive overleveraging or abnormal exposure
• One-sided betting without proper market evaluation or diversification
• Layering multiple buy and sell orders solely to exploit volatility
• Trading without reasonable technical, fundamental, or risk-based structure
• Strategies not reasonably replicable in real-market conditions
• Gap trading during periods of high volatility or illiquid market conditions
• Trading designed primarily to exploit short-term price fluctuations without structured risk management

One-sided betting refers to repeatedly taking positions only in one direction (buy-only or sell-only) without appropriate analysis, diversification, or controlled exposure.

Examples may include:

• Opening multiple positions heavily biased in one direction
• Excessively concentrating exposure on a single instrument
• Overexposing accounts during volatile market conditions
• Repeatedly entering trades without reasonable technical or fundamental justification

Trading activity that, acting reasonably, may expose Pipstone Capital to abnormal financial, operational, or reputational risk may be considered prohibited.

This may include:

• Overleveraging
• Overexposure
• One-sided betting
• Account rolling
• Trading during non-liquid market hours to exploit liquidity shortages
• Inconsistent or unrealistic trading behavior
• Strategies not reasonably sustainable under real-market funded conditions

It is prohibited to exploit:

• Pricing discrepancies
• Execution delays
• Feed latency
• Technical glitches
• Liquidity gaps

between platforms, brokers, or market environments in order to gain artificial advantage without genuine market risk.

Copy trading is permitted only between Pipstone Capital accounts owned and operated by the same individual.

The following are strictly prohibited:

• Copy trading between unrelated individuals
• Group trading
• Passing services
• Signal-sharing schemes
• Account management services
• Coordinated trading behavior across multiple users

Accounts exhibiting materially identical trading behavior may be investigated and subject to enforcement action.

Note: Floating risk parameters vary by account type. Please consult your specific challenge rules for exact thresholds.

1st Occurrence

2nd Occurrence

3rd Occurrence

Repeated or intentional violations of floating risk limits are considered non-compliant behavior.
​
​Purpose of the Enforcement Protocol

The above protocol is designed to allow traders to retain a portion of their profits despite identified violations, while protecting Pipstone Capital from prohibited trading practices and excessive risk exposure.

Rather than automatically denying payouts for initial violations, the structured deduction system provides traders with an opportunity to receive adjusted payouts while reinforcing responsible trading standards.

Repeated violations will result in progressively stricter enforcement, including permanent account termination.

All accounts are subject to compliance review, particularly at the payout stage.

Passing a challenge or reaching payout eligibility does not override policy violations.

Pipstone Capital reserves the right to review:

• Execution patterns
• Trade timing
• Risk exposure
• Position structuring
• Account relationships
• Behavioral consistency

Any activity that, acting reasonably, may expose the firm to abnormal financial, operational, or reputational risk may be considered non-compliant.

Violations identified during review may result in:

• Payout deductions
• Manual review
• Payout denial
• Account breach
• Permanent account closure
• Restriction from future participation

Pipstone Capital reserves sole discretion in determining whether trading activity violates the spirit or intent of the evaluation model.