Explanation of the "Gambling" Rule at Ylos Trading
The "Gambling" Rule, or "All In (Gambling)" at Ylos Trading, does not directly prohibit the use of the maximum number of contracts allowed by the account, but there's an important distinction:
Definition and Application:
- Use of Contract Limits: While it's not forbidden to use the maximum number of contracts allowed by the account, this use must be consistent with the normal pattern of your operations. This means if you occasionally or regularly trade with maximum contracts as part of your trading strategy, this is permitted as long as this practice is a regular and documented part of your trading plan.
- Specific Prohibition: What is forbidden is using the maximum number of contracts during times of extreme volatility or in situations not aligned with your historical trading behavior, with the aim of making quick gains. For example:
- Volatility Moments: If you normally trade with a moderate volume and suddenly decide to maximize your number of contracts during a news event or a period of high market volatility, this could be seen as gambling, since it's not consistent with your trading pattern.
- Inconsistency: If the increase to using the maximum limit isn't part of your normal trading strategy but rather a move to capitalize on unexpected market movements, this is considered excessive risk behavior, similar to gambling.
Objectives:
- Consistency: The rule aims to promote consistent and disciplined trading practice, where position size decisions are based on analysis, risk management, and strategy, not high-risk bets for quick gains.
- Risk Management: It encourages traders to maintain a balance between risk and reward, avoiding excessive market exposure that could result in significant losses.
Consequences of Violation:
- Evaluation: If Ylos Trading notices a pattern where the use of the maximum number of contracts does not align with the trader's normal strategy, this could be evaluated as gambling.
- Sanctions: This might lead to a review of the account, potentially resulting in warnings, suspension of withdrawals, or in extreme cases, cancellation of the Master account, depending on the severity and frequency of the violation.
Summary: The gambling rule at Ylos Trading isn't about the number of contracts traded per se, but about how and when those contracts are used. There must be consistency between the positions taken and the trader's usual trading strategy, avoiding using the maximum contract limit just for perceived opportunities for quick gains.