Glossary · Prop Firms
Grid Trading
Grid trading is a strategy that places multiple buy and sell orders at fixed price intervals above and below the current market price, forming a layered grid. As price moves through these levels, positions accumulate, often building one-directional exposure without a defined exit plan. Most prop firms classify it as a prohibited trading strategy rather than a permitted style.
Why it matters
A grid can quietly stack multiple open positions in the same direction, so a sharp move against that direction triggers many losses at once rather than a single, sized risk. Firms treat this as evidence of no defined risk management or exit strategy, which runs against rules built to test disciplined decision-making rather than mechanical order-stacking. Depending on the firm's risk assessment, a flagged grid can mean a restart from Phase 1, a hard breach on a funded account, or denial of a payout.
Example
A trader places buy orders on AUD/USD at 20-pip intervals (for example, at 0.6700, 0.6720, and 0.6740) and sell orders at 20-pip intervals below and above the current price (say, 0.6680, 0.6660, and 0.6640), with no stated exit plan. As price oscillates through these levels, positions accumulate on both sides. If the market then breaks sharply in one direction, every order on the wrong side of that move loses value simultaneously, rather than the trader having taken one planned position with a defined stop.
Common misconception
Traders often assume grid trading is simply a systematic style, no different from any other rules-based approach. Firms don't see it that way: they flag it as a risk-management violation because it produces accumulated, undefined exposure rather than a single planned trade with a clear entry, stop, and target. Running the grid manually or through an expert advisor makes no difference; risk teams look at the pattern of layered orders in the account history, not the tool used to place them.
Related terms
See also
Check the FTMO firm profile for its specific prohibited-strategy language before starting a challenge, since wording and enforcement vary by firm.
Sources
Risk disclaimer: Trading carries a substantial risk of loss and is not suitable for everyone. Prop-firm evaluations charge fees and most traders do not pass. Nothing here is financial advice; figures can change, so verify current terms with the firm before purchasing.
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