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.

Opening and closing trades in under 60 seconds is classified as High-Frequency Trading (HFT).

This type of trading focuses primarily on execution speed rather than structured market analysis and responsible risk management and is not permitted under our model.

To maintain fairness for both the trader and the firm, Pipstone Capital applies a structured tolerance policy:

1st occurrence
→ Payout approved with deductions
→ Account closed following payout processing

This approach allows traders to still remain overall profitable while ensuring the firm is not negatively exposed to prohibited execution behavior.

2nd occurrence
→ Manual risk review
→ Outcome determined at Pipstone Capital’s discretion

3rd occurrence
→ Immediate account failure
→ Payout denial
→ Permanent account closure

Repeated or intentional short-duration trading is considered non-compliant behavior.

Opening additional positions while an existing trade is in drawdown (loss) is considered recovery or gambling behavior.

You may open only one additional position at a better price level. Repeatedly adding to losing trades or increasing exposure while in drawdown is strictly prohibited.

This includes:

• Increasing lot size while trades are in loss
• Layering multiple recovery positions
• Aggressively averaging down losing trades

Stacking refers to opening multiple positions in the same direction on the same instrument.

You may open a maximum of 4 concurrent positions per symbol-side, and only when existing positions are in profit.

Excessive directional exposure or position concentration is considered risk manipulation.

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.

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.