Reverse trading refers to the strategy of simultaneously opening opposing positions on different trading accounts, often across multiple firms. The primary intent behind this practice is to hedge bets, mitigate potential losses, or exploit discrepancies between account regulations and risk management systems. While hedging is a legitimate trading strategy when used within a single account, reverse trading across multiple accounts can be problematic, especially within the framework of prop trading firms that enforce strict risk and drawdown policies.
Signs and behavior, which includes risking the full daily loss on one trade, which often indicates reverse trading between different firms. If Reverse Trading or Arbitrage Hedging activity is detected on your Monevis account, it will be marked as breached and will no longer be tradeable.