# Hedging and Prohibited Actions

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**Important Note** Engaging in hedging or other prohibited actions, even during the challenge phase, may lead to account termination. Additionally, during payout audits, FlexyTrade reviews trading logs from the challenge phase, not just those from the performance or InstaFunded accounts.
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**What is Hedging?** Hedging is when you hold both long and short positions in the same or related assets at the same time. While traders often use this strategy to reduce risk or lock in profits, it is *strictly* prohibited on the FlexyTrade platform because it can be abused or used for manipulation.

**Why is Hedging Prohibited?**

* **Risk Manipulation**: Hedging allows traders to artificially minimize risk by opening opposing positions. This can exploit FlexyTrade’s capital without exposing you to actual market risks, undermining the integrity of the firm’s risk management systems.
* **Violation of Trading Ethics**: FlexyTrade expects traders to adhere to ethical guidelines, maintaining transparency and honesty in their trading activities. Hedging violates these principles by hiding your true trading intentions and performance.
* **Compliance with Market Regulations**: Many regulatory bodies, including the CME (Chicago Mercantile Exchange), have strict regulations against hedging. To ensure compliance, FlexyTrade enforces a strict no-hedging policy for all its traders.

**Other Bad Faith Practices**

* **Multiple Account Usage**: Creating multiple accounts to bypass risk guidelines and manipulate results by splitting positions across accounts to avoid drawdown limits.
* **Trade Copying**: Using software to replicate trades across multiple accounts, creating a scenario where one account profits while another incurs losses, distorting performance records.
* **Synthetic Gains**: Engaging in high-leverage trades across multiple accounts to guarantee profits in one account, manipulating the your evaluation and accessing live sim capital unfairly.

If you're caught hedging or engaging in any other shady practices, FlexyTrade will shut down *all* your accounts immediately. Any profits you've made will be forfeited, and you may even be permanently banned from the platform. These measures are in place to keep the trading environment fair for everyone.

**Commitment to Fair Trading Practices** FlexyTrade is committed to fostering a transparent and ethical trading environment. All traders must follow these policies and trade with the highest integrity. Any attempts to circumvent these rules will lead to serious consequences, including losing your account and trading privileges.

**Prohibited Actions**

* Trading during Limit Up and Limit Down market conditions.
* Engaging in gap trading.
* Manipulating markets through unconventional trading strategies.
* Trading on any account other than the specified account.
* Engaging in trading practices that do not reflect real market conditions.
* Using unapproved APIs or methods that misrepresent genuine trading activities.

By following these guidelines, you’ll help maintain a fair, transparent, and thriving trading environment on FlexyTrade!


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