Automated Strategy Rules in Prop Firms
Most prop firms allow automation, but only if it fits their definition of “normal.” If your strategy fires orders like a bot, moves stops like a bot, or behaves like HFT-lite, the firm will ban you fast. Automation is fine until it looks abusive — then it's a violation.
What Prop Firms Consider Allowed Automation
Prop firms usually allow:
- bracket strategies
- ATM strategies
- auto-breakeven stop rules
- auto-trail stop rules
- platform-native strategy templates
If the automation is reactive (managing open orders), firms generally approve it.
Automation Prop Firms Consider Banned
These get you terminated instantly:
- third-party trading bots
- tick-by-tick scalpers firing hundreds of orders
- API-driven trade engines
- auto-entry algorithms running without human confirmation
- news bots reacting to economic releases
- DOM manipulation bots
If your strategy acts without your direct manual decision, the firm will classify it as an algorithmic trading violation.
How Prop Firms Detect Bots
Risk engines analyze your execution just like they do in order frequency checks and platform manipulation detection. They track:
- millisecond-level timestamps
- identical behaviors across multiple sessions
- perfect pattern repetition
- superhuman reaction speeds
- orders placed consistently within the same time slice
Humans hesitate. Bots don’t. Risk engines know the difference.
Red Flags That Trigger Bot Review
1. Identical Entries Across Multiple Accounts
If you fire the same trade at the same time on stacked accounts with zero variance, firms assume a bot or an unauthorized copier.
2. High Message Rate With Low Fill Rate
Bots spray orders. Humans don’t. If your order-to-fill ratio is insane, you get flagged.
3. Entries Exactly on Candle Open
Firms know this is typical bot behavior. Humans are rarely that precise.
4. Zero-Latency Cancel/Replace Behavior
No manual trader can cancel and re-place orders with sub-20ms consistency.
Allowed vs Banned Automation Summary
| Allowed | Banned |
|---|---|
| ATM bracket strategies | API-autonomous bots |
| Auto-BE stop rules | High-frequency scalpers |
| Auto-trailing stops | DOM manipulation bots |
| Platform-native strategy templates | News reaction bots |
How to Use Automation Without Getting Banned
- enter trades manually
- use ATM strategies only after the trade is opened
- avoid rapid cancel/replace cycles
- don’t fire dozens of orders per minute
- avoid “hands-off” strategies
If you aren’t manually choosing your entries, it’s illegal in almost every prop firm.
Final Takeaway
Automation is allowed — fully autonomous bots are not. If your strategy behaves like an algorithm instead of a person, the risk desk will spot it immediately. Keep automation limited to management and let your manual execution make the decisions.