Tick Scalping: What It Is and How to Stay Compliant
Tick scalping refers to a high-frequency trading method where traders attempt to gain small profits—typically just a few ticks or points—by entering and exiting trades in rapid succession. While this may appear profitable in the short term, it can lead to sustainability issues, execution inconsistencies, and policy violations on evaluation or funded accounts.
Why Tick Scalping is Restricted at TX3 Funding
At TX3 Funding, we encourage strategies that are realistic, scalable, and compliant with live trading conditions. Tick scalping violates these principles for the following reasons:
Reason | Explanation |
Liquidity Pressure | Frequent, rapid trades increase server and liquidity demands. |
Execution Risk | Real markets do not guarantee perfect fills on low-margin, quick trades. |
Sustainability Concerns | Strategies relying on 1–2 tick profits often break down in live conditions. |
What Gets Flagged as Tick Scalping?
At TX3 Funding, we review both individual trades and overall trading behavior. A trader may be flagged for tick scalping if they consistently meet the following patterns:
Criteria | Flagged When... |
Low Profit Per Trade | Profitable trades repeatedly close with gains of less than 10 points. |
Short Holding Time | The average duration of profitable trades is under 5 minutes. |
High Trade Frequency | Dozens of trades are opened and closed rapidly, typically within seconds or 1–2 minutes. |
Overuse of Tight Stops | A pattern of trades using extremely small stop-loss and take-profit levels (e.g., 1–2 ticks). |
These patterns are evaluated in combination. A single short-duration or small-profit trade is not an automatic violation, but repeated behavior over time can lead to a flag for tick scalping.
Examples of Tick Scalping (Flagged Patterns)
Example | Buy Price | Sell Price | Duration | Profit | Why It Would Be Flagged |
1 | 4182.00 | 4182.75 | 15 seconds | $7.50 | Profit < 10 points and extremely short hold time |
2 | Multiple | Multiple | Avg: 25 sec | Avg: $10 | Trading history shows repeated small gains and short durations |
How to Stay Compliant
To avoid being flagged for tick scalping at TX3 Funding:
Recommended Practice | Details |
Hold for at least 10 points profit | Set realistic profit targets per trade. |
Maintain avg. hold time of 5 minutes | Avoid frequent short-term trades. |
Avoid excessive micro trades | Multiple small trades with minimal profit can trigger a violation. |
Use realistic stop-loss/take-profit levels | Avoid 1–2 tick limits; use levels aligned with market structure. |
Conclusion
Tick scalping is not a permitted strategy at TX3 Funding due to the risk it presents to long-term performance and trading environment integrity. Traders are encouraged to adopt strategies that align with real market conditions and our platform guidelines.
By maintaining a minimum 10-point profit target and a 5-minute average hold time, you’ll ensure compliance and improve your chances of success both during evaluation and with a funded account.