What is the difference between breach, reject order and flag?

Quick answer

A breach ends the account. A rejected order is refused before it is placed, and the account keeps trading. A flag records that a rule was tripped without stopping anything, so your team can review it, typically before a payout. Each suits different kinds of rules.

Detailed answer

Choosing the right action avoids both lost money and unhappy traders.

Breach

  • Ends the account immediately.
  • Best for limits where the damage has happened, such as loss limits.
  • Recorded with the rule, reason and time.

Reject order

  • Prevents the violation instead of punishing it.
  • Best for limits that can be checked before trading: lot size, instruments, positions, leverage, hours.
  • The trader sees the refusal and can adjust.

Flag

  • Records the event and lets trading continue.
  • Best for behaviour that needs judgement, such as very short trades.
  • Stored per account with the rule, reason, number of occurrences and first and last time seen.

Example: maximum lot per order of 5

  • Reject: an order for 6 lots is refused.
  • Flag: the order goes through, and the account is flagged for review.

Most firms reject on size limits, because preventing the trade is kinder than punishing it later.

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