Trading Rules of a Crypto Proprietary Trading Firm

If you happen to violate any of the Trading Objectives, that specific account will be automatically invalidated and will no longer be eligible to continue in the Evaluation Process. If the violation occurs on your HyroTrader Account, the corresponding HyroTrader Account Agreement will be terminated. However, if you wish to become a Trader, you can always start again from the beginning and order a new HyroTrader Challenge. Please note that there are no discounts for repeat attempts. It’s important to respect the rules and trade safely to avoid any breaches. 

No, it is not required to close your positions overnight during the HyroTrader Challenge or Verification. You are allowed to keep your positions open throughout the night and even over the weekend.

Traders are required to adhere to the following Risk Management Rules to safeguard our capital and support the success of our traders. We actively monitor each account for signs of gambling or reckless trading behavior, with a specific focus on the following situations:

Maximum Risk Per Trade: Traders must not exceed a maximum allowable risk per trade of 3% of their account balance. Therefore, if your stop loss is triggered in a single trade, the loss should not exceed 3% of your overall capital. This limit is crucial for effective risk management and capital protection.

Martingale Strategy: The use of the Martingale strategy is strictly prohibited. Martingale is a high-risk betting system that involves doubling the stake after each losing trade. This strategy can lead to substantial losses and goes against responsible trading practices.

Prohibition of Hedging Across Different Accounts: Traders are prohibited from hedging positions across two or more different accounts simultaneously. Hedging involves opening opposite positions with the intent to offset potential losses, which can result in decreased transparency and increased risk.

Profit Distribution Rule: No single trade should contribute more than 40% to the total profit generated by a trader. This rule aims to prevent excessive reliance on a single high-risk trade and encourages a diversified and responsible trading approach.

Stop Loss Obligation: Stop loss orders are vital risk management tools in trading, designed to limit potential losses by automatically executing a trade when a predefined price level is reached. Traders are required to place a stop loss on every position to ensure proper risk management.

Accounts are subject to regular manual reviews, during which we assess for signs of gambling or an “all-or-nothing” mentality. In cases of extremely high risk, we retain the right to implement any of the following actions:

• Issuing a warning
• Removing account profits
• Adjusting the payout
• Temporarily reducing profit splits
• Rejecting withdrawal requests
• Terminating the account in full.

To meet this objective, you must trade for at least 10/5 days during the current duration cycle. At least one position must be opened on each of these days. A trading day is defined as a day when at least one trade is executed. If a trade is held over multiple days, only the day when the trade was executed is considered to be the trading day.

If you achieve a profit goal in fewer trading days, we still require a minimum of 10 trading days to assess your track record and the sustainability of your trading skills. It’s important to note that trades should be of similar size to those made previously. Any trade that is less than 70% of the average size of your past trades will not be counted.

• Completion of Required Tasks: Participants must complete all required tasks to be eligible for the free funded challenge account. In the event of task reversals during the trading period, the user will not be eligible for payout.
• One Account per User: Each user is limited to creating only one free funded challenge account.
• Free $5,000 Challenge Account: Upon successful completion of all tasks, participants will receive a free $5,000 challenge account.
• Profit Split: After passing the trading challenge, participants are eligible for a 50% profit split.
• Validity of Challenge Account: The $5,000 challenge account is valid for one month after successfully completing the trading challenge.
• Profit Target: To initiate the first withdrawal, participants need to achieve at least a 10% profit target.
• Withdrawal Period: Participants have one month to withdraw their trading profits from the challenge account.
• Continued Cooperation: HyroTrader may offer continued cooperation based on their satisfaction with the participant’s trading abilities and strategy.

During the verification phases, the 5% is calculated based on your initial funded account capital. For example, if your funded account is $50,000, the total daily drawdown for all trades would be $2,500. It’s important to note that this amount remains constant and does not change daily. When calculating the drawdown, all floating losses, profits, and fees are included. The daily server reset occurs at UTC +2.

For a $5,000 account, the initial daily drawdown is $250, and max drawdown $500. Once you achieve 10% profit, reaching an overall account balance of $5,500, the maximum drawdown becomes locked at $5,000. This ensures that your daily or overall losses never go below your initial starting balance and gives you much more flexibility for trading.

Please note you still need to follow SL obligation with a maximum allowable risk per trade of 3%.

If you exceed your locked account balance, your stop losses revert to the normal levels of 5% daily and 10% maximum. If you wish to utilize the pro max stop loss, you must once again achieve a 10% profit from your initial account balance.

The Pro Max Loss rule is applicable to traders who are trading with Hyrotrader real funds (traders who had their first 3 payouts).

It’s entirely up to you, as long as you follow good risk management. However, please be mindful that if you open, for instance, 2 trades each risking 3%, and both incur losses on the same day, your account would be down by 6%. This would violate the daily drawdown rule and could result in the loss of your account.

Yes, if you haven’t executed any trades for the past 90 days, your account will be disabled. You’ll receive an inactivity reminder email after 60 days, and after 90 days, you’ll receive an email notifying you about the disabling of your account.

As a funded trader on a ByBit sub-account, you can request your payout whenever you wish, without any restrictions. There’s no need to wait—once you’ve made a profit, you can immediately request your payout.

It’s important to note that this rule applies only to traders on ByBit sub-accounts.

As with any of our challenges we are looking for talented traders who understand the markets and can demonstrate solid trading strategies with proven risk management. 

Now as we are one of the only crypto prop firms to allow spot trading. It is important that we also ensure we run a  fair strategy for spot traders that aligns with our overall evaluation rules while also accounting for the specific risks associated with spot markets. 

Diversification Requirement:At Hyrotrader we also emphasize the importance of diversification and risk management, especially in the volatile crypto market. To ensure balanced trading strategies, we have established specific requirements for spot trading as defined below:

Spot-Specific Cap: To prevent overconcentration in a single asset, safeguarding against significant losses from market volatility, such as those experienced with Terra LUNA.

• Rule: No more than 3% of the total account balance may be allocated to a single spot position, and the total balance at risk across all spot positions cannot exceed 5% at any given time when trading spot without a stop loss. 

• Example: With a $100,000 account, you may allocate up to $3,000 to a single asset and a total of $5,000 across all spot trades. Again this applies only when trading spot without a stop loss. 

Trading Spot with a Stop Loss and Spot-Specific Cap: 

Spot trading with a stop loss offers additional flexibility but requires careful risk management:

While there’s no cap on the amount invested in a single trade when using a stop loss, the maximum loss must not exceed 3% of the account balance.

• Example: Entering a trade for asset A at $2.00 with a stop loss at $1.00, and buying 3,000 units, utilizes $6,000. However, if the stop loss is triggered, your loss would be $3,000 (the difference between the entry price and stop loss, multiplied by the number of units), which complies with the 3% rule, as the loss does not exceed the threshold relative to the total account balance.

Combining Spot and Margin Trading with Enhanced Risk Management

For traders engaging in both spot and margin trading, managing overall risk is paramount to success. We do not recommend combining both spot and margin trading for those who are new to prop firms or inexperienced, we would recommend this is undertaken by experienced traders only. 

Allocation Limits When Trading Both Spot and Margin (regardless if trading spot with a stop loss or not): While traders who wish to trade both spot and margin are permitted to allocate up to 5% of their account balance to margin positions and another 5% to spot positions  for a maximum of 10% allocation in this instance, this allowance comes with an important caveat regarding risk management, particularly when trading without a stop loss.

Daily Drawdown Limit: The combined daily losses from both spot and margin positions must not exceed 5% of the total account balance. Surpassing this threshold results in failing the challenge or forfeiting the funded account.

Risk Management: This rule underscores the need for meticulous moderation and risk management, especially when operating both types of trades simultaneously. It’s not just about the allocation but how these allocations can affect your daily drawdown limit.

Example: Imagine your spot positions undergo a 2% loss due to market downturns, and concurrently, your margin trades are also in the red. As soon as the cumulative loss from both trading activities reaches or surpasses 3%, you’ve hit the daily 5% drawdown limit. This scenario illustrates the importance of not just splitting your focus between spot and margin trading but also carefully monitoring and managing the overall risk to ensure that the sum of losses does not breach the set limit.

By adhering to these guidelines and maintaining a disciplined approach to risk management, traders can navigate the complexities of trading both spot and margin instruments within the HyroTrader platform, optimizing their potential for success while safeguarding against significant losses.

Liquidity and Market Cap Considerations: From time to time given the amount of new assets that come into the market we may roll out criteria before we approve an asset to be spot traded. These will be announced and a comprehensive list will be provided. This is to protect against rug pulls and airdrop pump and dumps that can lead to extreme risk. If you are not sure please ask us before opening a spot trade in a new asset. This is so we can confirm the risk associated with low liquidity coins that could lead to slippage or being stuck in positions and not allowing you to exit your position as well.

Maximum Open Trade Count:

We currently allow for no more than 10 concurrent open spot trades to prevent overextension and to maintain focused trade management. This is for both spot traders with and without stop-loss. If trading without stop-loss than a total of 5% of your account balance can be risked across spot assets with no more than 3% allocated in a single asset.

When trading without a stop loss you can utilise more than 5% of your account balance however you must remember to be mindful of stop-loss placement. As in this instance if your SL on any spot trade exceeds 3% of your daily balance you would be in breach of the challenge and fail the challenge or loose the funded account. Again for avoidance of any doubt if you are a spot trader who likes to trade with stop loss.

Please remember where you set your SL should factor in your posistion size and a max of 3% of your account should it be triggered. For example lets say you havr a $100k balancr and you enter a spot trade in asset A and you buy 50k into a spot posistion. However you apply a stop-loss. Well it is imperative that the stoploss is placed to ensure you don’t loose more than 3% ($3,000) if the trade was to hit SL. Thus just placing a stop-loss and entering large posistions without thinking about the potential risk can lead to a breach. IE). Entering the same posistion

No Spot  Leverage: 

For spot trading, we enforce a strict no leverage rule. Meaning you cannot use spot/margin to leverage your spot positions. This is to help maintain risk. Any breach of this rule can lead to a failure of your evaluation or loss of a funded account. 

Drawdown Rules Explained For Profitable Spot Positions:

We understand that spot positions can be very profitable and when executed properly a very thrilling experience for traders. However with standard challenges you also do not want to cut a runner due to a potential pull back in the market. Nor do we want you to be penalized for having a profitable trade which is beneficial for you and us. As such with spot positions once your position doubles if you are to close out half of the position realizing profit, and thus making the position risk free the remaining open position will not count towards your draw down if the trade runs up and pulls back. 

Which is demonstrated below: 

1. Profit Realization  – Once the value of the spot position doubles, the trader is advised to sell half of the position. This locks in enough profit to cover the initial investment, effectively making the remaining position “risk-free” in terms of the initial capital outlay. While allowing you to let the winner run. (Now you do not have to do this but if you choose not to realize some profit then this open trade will apply to the daily and maximum drawdown rules). 

2. Adjustment of Drawdown Calculation If Partial Profit Is Realized:

   – After taking profits, the remaining position no longer counts towards the trader’s daily drawdown limit. This means if the value of this position decreases due to a market pullback, the reduced value does not affect the trader’s drawdown calculation. Allowing you to let your winner run and look for new trades. As both you and the firm are protected from derisking the original capital invested in the trade. 

Example:

1. Initial Trade. The trader buys $5,000 worth of a cryptocurrency as a spot position.
2. Position Doubles. The value of the cryptocurrency rises to $10,000.
3. Profit Taking: The trader sells $5,000 worth, recouping the initial investment.
4. Remaining Position: The trader retains the other $5,000 in the cryptocurrency, now a “risk-free” trade.
5. Market Pullback. The remaining position’s value drops to $3,000.
6. Drawdown Consideration: Despite the drop, this $2,000 loss does not affect the trader’s drawdown calculation as per the new rules.

So why do we do this and what are the benefits:

1. 1. Encourages Smart Profit-Taking: Traders are incentivized to lock in profits, which aligns with sound risk management principles.
   2. Facilitates Risk-Free Trades: After profits are taken, traders can explore more aggressive strategies without worrying about the drawdown affecting their account status.
   3. Supports Trading Flexibility: Allows traders to hold onto winning positions longer, potentially capitalizing on extended market trends without immediate drawdown pressure.

• Payouts: Upon being a funded trader and on a live funded account any profit you make in spot trades can be requested to be paid out in the spot asset alongside your other profit paid in USDT. Thus allowing you to hold onto the spot positions and not have to convert them to USDT if you wish to do so. 

Hyro Recommendations for New Traders: New traders should focus on either spot or margin trading to avoid the complexities of managing risk across both. Experienced traders can choose to engage in both, provided they maintain strict adherence to risk management rules to prevent quick failures in challenges. By engaging in both spot and margin on the same challenge you agree that you have read and understand the rules above.