What is a minimum holding time rule, and why use one?
Quick answer
A minimum holding time rule requires trades to stay open for at least a set time, such as 60 seconds. It discourages tick scalping and latency strategies that exploit simulated execution rather than market skill. Firms usually flag or exclude such trades rather than ending the account immediately.
Detailed answer
Why firms use it:
- Simulation gaps: very short trades can exploit price feed delays.
- Real-market realism: strategies relying on instant fills may not survive real execution.
- Payout protection: profits from sub-second trades are often disputed anyway.
How to apply it:
- Flag: record trades closed too quickly for review.
- Exclude: remove their profit at payout.
- Breach: end the account, for repeated or severe cases.
PropExecutor's minimum hold time rule is judged from closed trades, defaults to flagging the account for review, and can be set to breach instead. Flags are recorded on the account with the number of occurrences.
Setting the threshold
Common thresholds range from 30 seconds to a few minutes. Too long and genuine scalpers are caught; too short and latency strategies still work. Review flagged trades to see where genuine trading ends and exploitation begins in your own data.
Publish the threshold in your rules.
PropExecutor team · Updated
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