At Pipstone Capital, we are committed to promoting responsible risk management and professional trading behavior. These rules apply to all challenge types (1-Step, 2-Step, and Instant).
The following practices are strictly prohibited and enforced under our Responsible Trading Policy. Engaging in these behaviors may result in account breach, payout denial, or account termination.
🚫 Prohibited Trading Practices
1️⃣ Trades Under 60 Seconds (HFT)
Opening and closing trades in under 60 seconds is classified as High-Frequency Trading (HFT).
This type of trading focuses on rapid execution rather than structured market analysis and risk management, and is not permitted under our model.
2️⃣ Drawdown Add-Ons (Recovery Trading – Hard Breach)
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. Opening multiple positions while trades are in loss is strictly prohibited.
This includes:
Increasing lot size while in drawdown
Repeatedly adding to losing trades
3️⃣ Stacking (Position Limits – Hard Breach)
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 trades are in profit.
Exceeding this limit is considered risk manipulation.
4️⃣ Hedging (Not Allowed)
Opening simultaneous buy and sell positions on the same instrument is strictly prohibited.
Hedging artificially offsets risk and does not align with our funded trader model.
👉 See “Enforcement & Outcomes” below for how violations are handled.
📘 Enforcement & Outcomes (How Violations Are Handled)
To ensure fairness and clarity, we distinguish between:
Minor Execution Violations (HFT)
Risk Manipulation Violations (Hard Breach)
🟡 1. Minor Execution Violations (HFT Rule)
Trades under 60 seconds (HFT) fall under execution behavior, not direct risk manipulation.
To maintain fairness, we apply a structured tolerance model:
1st occurrence
→ Payout approved with deduction2nd occurrence
→ Account placed under manual risk review
→ Outcome: Pass OR Fail (case-by-case)3rd occurrence
→ Immediate account failure
🔴 2. Risk Manipulation Violations (Hard Breach)
The following are considered direct risk manipulation and result in immediate account failure (no tolerance):
❌ Hedging
❌ Drawdown Add-Ons beyond allowed limit
❌ Stacking beyond permitted structure
These actions:
Artificially alter risk exposure
Do not reflect real trading conditions
Compromise the integrity of the model
⚠️ Important Clarifications
Passing a challenge or reaching payout does not override violations
All accounts are reviewed at the payout stage
Violations identified at this stage may result in:
Deduction
Manual review
Or account failure