Hotforex Terms and Conditions

Broker Discussion
1

H I found on the internet that hot forex allow all types of strategies except arbitrage. However i found this in their T &C under prohibited trading;

“Abusive trading strategies, strategies aimed at risk less profits by opening opposite orders during periods of volatile market conditions, during news announcements, trading gaps, opening gaps (trading sessions starts) or on possible gaps…”

I have 2 questions;

  1. If a broker allow hedging, is hedging prohibited in volatile times?
  2. What is the meaning of saying opening gap is prohibited? Does that mean if I buy at the close of a week and the weekend makes a favorable gap they would wipe out the profit?
  3. Are there brokers that allow these types of trading, or is it just this broker?
2

  1. Hedging is a type of a trade that mitigate some risk exposure like currency risk, default risk, etc. arising from open position. In other words the trade that aims at reducing uncertainty, especially avoiding negative outcomes. It’s usually done with futures or options. How do you want to make hedging using CFDs?

  2. Nope, because transferring position to the next week (next trading session) you gain no edge. It’s not an attempt to profit from non-market conditions, latency etc.

  3. Other brokers advertise that they tolerate some sneaky types of trading strategies but usually there is already a disadvantage in execution or spreads which reduces edge and profit opportunity.