Will TradeDay evaluate and fund scalpers?

The short answer is yes, we do fund scalpers, but there are some scalping practices we don’t allow. If you consider your trading as scalping, then please read this carefully. 

Prohibited at TradeDay:

1. Using automated trading systems designed to scalp at an extremely high frequency.

2. Strategies that produce more than 200 trades in a day.
   

3. Strategies that trade in a few seconds, designed to capture just a couple of ticks at a time.

4. Any strategy that attempts to capture queue position advantage by gaming the simulated matching engine. (Such as entering and exiting using limit orders to capture a tick or two in low volatility, high liquidity products. For example, bond markets).

FAQ on Gaming the sim fill algorithm click here.

Prohibited Trade Practices click here. 

We reserve the right not to fund traders, or make payouts to traders, who have found to abused this policy. No refunds will be offered.

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A note on scalping:

Scalping can have a broad definition, but in general, it is the practice of trying to make a lot of very small profitable trades in a very short time frame. The strategy usually involves entering tight stops and small profit targets at the time of market entry, often using bracket orders to enter and exit within a matter of seconds in an attempt to capture short-term market action. 

The main issue for TradeDay is that scalping can seem a relatively profitable strategy on a simulator, but in the live market, it often falls apart quickly. This is largely to do with how a simulated trading algorithm works, at times it may grant fills more generously than a trader could expect in the live markets (quick fills on limit orders, and not as much slippage on stops).

This means that a trader can use the strategy to pass the evaluation, and by doing so game the fill algorithm. But as soon as they are put into the live market they start to lose money.

Also, competing in this time frame for these quick short term trades are professional Trading Groups who spend millions of dollars a year on their trading engines, reducing latency in nanoseconds, and trading at a fraction of the cost that the retail trader has to pay in commission. This fierce competition for market making and quick ‘low risk’ scalps makes it very difficult for the trader sitting at home to operate in this time frame and be profitable with a scalping strategy.

 Please consider very carefully if scalping is for you.