Sudden Increase in Lot Size Considered "Gambling"

To ensure responsible trading, we monitor the average lot size a trader uses over a specific period. If a trader's lot size increases significantly beyond their average, this may be considered "gambling." Specifically, any increase over 100% (or doubling the average lot size) could lead to the removal of profits and account suspension/breach. Additionally, trade times will be reviewed to prevent manipulation, such as rapidly opening multiple large trades.

Each asset class will be considered separately given their contract size differs, however, the same rule applies to them.

Calculation Method:

Calculate Average Lot Size: The firm takes groups trades by asset class within a certain period and calculates the average lot size for each class.

Determine Maximum Allowed Lot Size: This average lot size is then doubled to set the maximum trade size allowed.

Example 1: Large Increase in Lot Size

Before: Trader typically trades 0.5 lots.

Average Lot Size: 0.5 lots.

Maximum Allowed Lot Size: 1.0 lots (double the average).

Now: Trader starts trading 5 lots.

Analysis: The trader's lot size increased by 900% (from 0.5 to 5 lots), far exceeding the maximum allowed 1.0 lot. This is considered "gambling," and the firm may remove profits earned from these larger trades.

Example 2: Acceptable Increase in Lot Size

Before: Trader typically trades 1 lot.

Average Lot Size: 1 lot.

Maximum Allowed Lot Size: 2 lots (double the average).

Now: Trader starts trading 1.5 lots.

Analysis: The trader's lot size increased by 50% (from 1 to 1.5 lots), which is within the allowable limit. No action is taken, as this is not considered "gambling."

Example 3: Minor Increase in Lot Size

Before: Trader typically trades 3 lots.

Average Lot Size: 3 lots.

Maximum Allowed Lot Size: 6 lots (double the average).

Now: Trader begins trading 4 lots.

Analysis: The trader's lot size increased by 33.33% (from 3 to 4 lots), which is within the allowable limit. This is acceptable, and no action is taken.

Example 4: Multiple Trades in Short Time Frame

Before: Trader typically places 1 trade of 0.5 lots.

Average Lot Size: 0.5 lots.

Maximum Allowed Lot Size: 1.0 lot (double the average).

Now: Trader places 10 trades of 0.5 lots each in quick succession.

Analysis: While the individual trades are within the allowable limit, the sudden multiple trades might indicate an attempt to manipulate the market. The firm will review the timing and pattern of these trades for any manipulative behavior.

By implementing these guidelines, the firm ensures that traders adhere to responsible trading practices, reducing excessive risk-taking and preventing market manipulation.

TraderScale have a third party finance team who analyse trading activity for a breach of rules. Their support team unfortunately cannot access trade history and therefore cannot provide consistency analysis, nor provide any form of advice regarding how traders can trade their accounts. Part of being a funded trader is being able to manage the corerct risk appetite and adhere to set rules. Your first consistency rule breach is considered a hard breach.