All spot traders need to notify us, because by default they are set to trade futures.
As with any of our challenges, we are looking for talented traders who understand the markets and can demonstrate solid trading strategies with proven risk management.
We are one of the only crypto prop firms to allow spot trading. It is important that we also ensure we run a fair strategy for spot traders that aligns with our overall evaluation rules while also accounting for the specific risks associated with spot markets.
Rules: With Stop loss
- No position size cap
- Maximum loss is 3% per trade
Without Stop loss
- Maximum 3% capital in a single position
- Total balance at risk cannot exceed 5% across spot positions
Trading Spot without a Stop Loss:
Diversification Requirement: At Hyrotrader, we emphasize the importance of diversification and risk management, especially in the volatile crypto market. To ensure balanced trading strategies, we have established specific requirements for spot trading as defined below:
Spot-Specific Cap: To prevent overconcentration in a single asset and safeguard against significant losses from market volatility, such as those experienced with Terra LUNA.
Rule: No more than 3% of the total account balance may be allocated to a single spot position, and the total balance at risk across all spot positions cannot exceed 5% at any given time when trading spot without a stop loss.
Example: With a $100,000 account, you may allocate up to $3,000 to a single asset and a total of $5,000 across all spot trades. This applies only when trading spot without a stop loss.
Trading Spot with a Stop Loss:
Spot trading with a stop loss offers additional flexibility but requires careful risk management:
While there’s no cap on the amount invested in a single trade when using a stop loss, the maximum loss must not exceed 3% of the account balance.
Example: Entering a trade for asset A at $2.00 with a stop loss at $1.00, and buying 3,000 units, utilizes $6,000. However, if the stop loss is triggered, your loss would be $3,000 (the difference between the entry price and stop loss, multiplied by the number of units), which complies with the 3% rule, as the loss does not exceed the threshold relative to the total account balance.
We require all our spot traders to inform us if they are trading spot to avoid risking the loss of their challenge. Once you place a spot order, you cannot change your trading style.
Combining spot and margin trading on one account is prohibited. If you want to trade both, you are allowed to have two challenges: use one for trading spot and the second for futures.