TradFi CFD Order Flow and Trading Behavior Policy
To maintain a fair, stable, and transparent trading environment, the TradFi CFD system continuously monitors all order flows and trading behaviors. In this trading model, user orders are typically routed to external liquidity providers (LPs) via a smart order routing system. Consequently, all trading activities must align with standard market practices and the execution standards set by our liquidity providers.
This document outlines the execution mechanisms, acceptable trading strategies, behaviors that may trigger risk reviews, and the corresponding risk management measures.
How are TradFi CFD orders executed?
In TradFi CFD trading, orders are generally executed through external liquidity.
The core mechanisms include:
External Liquidity Execution
User orders may be sent to external liquidity providers for matching and execution via a smart order routing system.
Market Quote Sources
Price quotes may originate from one or more liquidity providers and fluctuate dynamically based on market supply and demand, depth, and overall liquidity conditions.
Fill Price
Orders are typically executed at the best available market price. The actual execution price may differ from the quoted price at the time the order was placed due to market liquidity, order depth, volatility, or slippage.
This model is designed to provide users with stable market quotes, competitive spreads, and consistent market liquidity.
What is "Abnormal Order Flow"?
Under the external liquidity execution model, certain trading behaviors may be flagged as "Abnormal Order Flow" by liquidity providers or the trading system.
This generally refers to:
- Order behavior that causes an abnormal impact on market liquidity.
- Trading patterns that clearly rely on system latency or price discrepancies.
- Order activity that violates the execution rules of liquidity providers.
Such order flows may compromise the quality of market quotes or the stability of liquidity and may trigger further risk reviews.
Which trading strategies are generally allowed?
As long as the principles of fair trading are upheld, most common strategies are permitted, including:
- Trend trading
- Swing trading
- Reasonable news-based trading
- Automated trading strategies
- Compliant high-frequency trading (HFT) strategies
In certain instances, the platform may request a description of the trading strategy, execution architecture, or risk control parameters to ensure compliance with market execution standards.
Which behaviors are considered "Abnormal Trading Patterns"?
To maintain market stability and comply with liquidity provider rules, the following behaviors may be classified as abnormal trading patterns:
Market Manipulation
Attempting to influence prices or create false liquidity through coordinated trading, wash trading, or "spoofing" (fake orders).
Latency Arbitrage
Utilizing network delays, price update lags, or technical means to consistently execute orders just before or after a price update to create systemic arbitrage.
Low-Liquidity Scalping
Executing a high volume of ultra-short-term trades during periods of low liquidity (e.g., session rollovers, market open/close) to capture tiny price movements.
Abnormal High-Frequency Activity
Extremely high frequency of placing, canceling, or opening/closing positions that results in a large number of non-executed orders or impacts market liquidity.
Coordinated Cross-Account Trading
Using multiple accounts for coordinated or hedged trading to circumvent risk controls or gain an unfair advantage.
Which scenarios may trigger a risk review?
Specific patterns occurring at an unusual frequency or scale may trigger a risk control review, such as:
Locking Patterns
Simultaneously opening long and short positions on the same or highly correlated assets within a short timeframe, combined with frequent closing and reopening.
Price Gap Exploitation
Concentrating position-building during periods prone to price gaps (e.g., market open, after weekends, or session switches) and closing immediately after the gap occurs.
News Event Exploitation
High-frequency, short-cycle trading immediately before or after major economic data releases or sudden market events.
Low-Liquidity Trading
Large volumes of short-cycle trades executed when spreads have widened significantly or quotes are temporarily unstable.
Delayed Execution Patterns
Trading that consistently occurs around the exact moment of a price update, showing clear characteristics of latency arbitrage.
What measures does the platform take if Abnormal Order Flow is detected?
If system monitoring or feedback from liquidity providers indicates abnormal order flow, the platform may take the following actions:
- Adjust account leverage or margin requirements.
- Temporarily restrict specific trading functions.
- Suspend certain activity rewards or rebates.
- Conduct a deeper audit of the relevant trading behavior.
During the review period, certain account functions (including withdrawals) may be temporarily restricted until the audit is complete.
If the behavior is confirmed to violate platform rules or LP standards, the platform may take further action in accordance with the User Agreement and trading terms.
Risk Warning
TradFi CFD trading involves high leverage and significant market volatility. To mitigate risk and avoid triggering risk reviews, we recommend:
- Using leverage reasonably and controlling position sizes.
- Avoiding reliance on price latency or system discrepancies for arbitrage.
- Exercising caution during periods of low liquidity or high volatility.
- Ensuring your trading strategy complies with platform rules and market norms.
Users should fully understand the trading rules and formulate strategies based on their personal risk tolerance before trading.
The content provided herein is for reference and educational purposes only and does not constitute any financial, investment, trading, or legal advice, nor does it constitute an offer or solicitation to buy or sell any digital assets. Gate makes no express or implied representations or warranties regarding the accuracy, completeness, or timeliness of the information contained herein. Product features, interfaces, rules, and fee structures may be updated or adjusted at any time. Please refer to the latest announcements and the actual information displayed on the Gate platform for the most accurate details.
Digital asset investments involve significant risk, and prices may fluctuate substantially. You may lose the entire amount of your investment. Please make decisions cautiously based on your own financial situation and risk tolerance after fully understanding the associated risks. If necessary, you are advised to consult an independent professional financial or legal advisor.
For more information about potential risks, please refer to Gate's Risk Disclosure and User Agreement.
