5 Types of Forex Robots Banned by Prop Firms: Save Your Account!
Prop firms like FundedNext, FTMO, and others allow EAs but strictly ban high-risk robots that exploit rules or cause massive drawdowns. This detailed guide covers the top 5 prohibited types, why they’re blocked, and how compliant scalpers like ZNJ EA Robot pass challenges easily.
Martingale Robots: The Drawdown Killer
Martingale EAs double lot sizes after every loss, aiming to recover with one win. They start with 0.01 lots, then 0.02, 0.04, and explode during trends—often wiping 10-20% equity in hours.
Prop firms ban them because they violate daily drawdown limits (typically 5%) and total max loss (10%). FundedNext calls this “gambling behavior” with excessive margin use over 70%, leading to immediate breaches. A single losing streak on XAUUSD M5 can trigger all stops, as seen in backtests where 8 consecutive losses hit 50% drawdown.
Real Example: Imagine risking 1% on a $10k prop account. After 5 losses, your next lot is 32x larger—straight to violation. Compliant alternatives use fixed percentage risk (0.25-0.5%), like ZNJ EA’s trailing stops.
Grid Trading Bots: Uncontrolled Exposure Trap
Grid EAs place buy/sell orders at fixed intervals (e.g., every 20 pips) around price, profiting from ranging markets but exploding in trends. They open 10-50 positions without direction bias, tying up margin.
Firms prohibit grids for “market manipulation” and high exposure—one strong trend activates all stops, breaching rules. FundedNext explicitly lists grid trading as banned, citing simultaneous losses and artificial activity. Servers strain from bulk orders, mimicking HFT issues.
Risk Breakdown:
| Grid Size | Max Exposure (1% Risk Base) | Typical Prop Breach |
|---|---|---|
| 5 levels | 5% equity | Daily DD hit |
| 10 levels | 10%+ equity | Account terminated |
| 20+ levels | 20-50% equity | Instant ban |
Trend-filtered scalpers on M5 with H1 EMA checks avoid this, trading only pullbacks.
High-Frequency & Tick Scalping EAs: Server Killers
HFT/tick scalpers execute 100-1000s of trades per minute on M1 ticks, grabbing 1-2 pips each. They exploit spreads but overload demo servers and create “hyperactivity” (2,000+ messages/day).
Prop rules ban them for distorting prices, freezing platforms, and unfair advantages. FundedNext restricts HFT and tick scalping explicitly—warnings escalate to suspension after 3 violations, or immediate disable at 15k messages. Quick Strike methods (seconds holds) face the same fate.
Consequences Table:
| Violation Level | Action Taken | Example Impact |
|---|---|---|
| 1st (2k msgs) | Warning | Adjust strategy |
| 2nd | Second warning | Cumulative across accounts |
| 3rd/15k msgs | Breach/Suspension | Permanent ban |
M5 new-bar EAs like ZNJ SCALPER limit to 5-10 trades/day, staying under radar.
Arbitrage & Latency Robots: Unfair Exploits
Arbitrage EAs hunt price differences between brokers, latency delays, or hedge accounts. Latency types delay orders for “guaranteed” fills during low liquidity “dead zones.”
All props ban arbitrage outright—it distorts markets without real analysis. FundedNext prohibits all forms, including statistical arbitrage and demo errors exploitation, for violating TOS and fairness. Group hedging across accounts (opposite trades) gets terminated instantly.
Banned Variants:
- Broker arbitrage (price gaps)
- Latency trading (execution delays)
- Reverse arbitrage (hedge exploits)
Single-broker trend scalpers with fixed SL/TP comply perfectly, no multi-account nonsense.
Copy Trading & Hedging Bots: Correlated Risk Bombs
Copy EAs mirror signals from Telegram groups, other accounts, or services without original logic. Hedging bots open opposite trades across accounts for “risk-free” nets.
Firms ban them to avoid mass correlated losses—if 100 traders copy the same signal and it fails, the firm bleeds. FundedNext allows intra-account hedging but bans cross-account/group hedging and external copy trading (even family). “Pass Your Challenge” services lead to permanent bans.
Allowed vs Banned:
| Type | Allowed? | Reason |
|---|---|---|
| Same-account hedge | Yes | Internal risk management |
| Cross-account | No | Correlated firm risk |
| External signals | No | No original strategy |
Your custom MQL5 code ensures uniqueness for prop success.
Why Prop Firms Enforce These Bans
Props fund traders but protect capital via rules: 5% daily DD, 10% total, no exploits. Banned EAs fail because they prioritize short-term wins over sustainability—martingale/grids shine in backtests but crash live. FundedNext monitors for “abuse” like all-in trades near daily limits, treating them as gambling.
Backtesting helps: Test over 1-3 years with 99% modeling quality. Real-time metrics (win rate >60%, avg hold >5min) prove compliance. Platforms like MT5 must match firm brokers—no custom data feeds.
Compliant Alternatives: Build Prop-Ready EAs
Focus on low-risk scalpers:
- M5 timeframe, H1 trend filter (EMA 200)
- 0.25-0.5% risk/trade
- Trailing stops, max 1-2 open trades
- New-bar entries only
ZNJ EA embodies this: EMA cross in trend direction, percentage sizing, spread checks. Passes FTMO-style challenges consistently.
Starter Settings for Props:
- RiskPercent: 0.3
- SL: 200 points (XAUUSD)
- TP: 400 points
- MaxSpread: 30 points
- TrailStart: 150 points
How to Create Your Own Prop-Safe Robot
- Use MQL5: Start with OnTick() new-bar check.
- Add filters: H1 trend, spread < max.
- Risk calc: Lot = (Risk% * Balance) / (SL * PointValue)
- Test: Strategy Tester, then demo 1 month.
- Deploy: Optimize per firm (e.g., FundedNext no HFT).
Full code templates available—avoids all bans above.
Top Prop Firms for Compliant EAs (2025)
- FundedNext: Clear rules, allows scalping if no hyperactivity.
- FunderPro: EA-friendly, low restrictions.
- WeMasterTrade: Instant funding, ZNJ-tested.
Always read TOS—rules evolve.
Final Tips for Traders
Verify EA with prop simulator first. Avoid free “prop passers”—often hidden grids. Track metrics: <50 trades/day, drawdown <3%. Your edge? Original, risk-managed code like ZNJ series.