Introduction
The ability to hedge positions provides traders at proprietary trading firms with strategies that may reduce exposure and improve risk control. The following provides detailed firm profiles, operational frameworks, and evaluation processes for firms that allow hedging.
FTMO
FTMO allows traders to open books of both long and short positions on the same or related instruments. The evaluation consists of a Challenge phase (requiring profit target achievement and drawdown discipline) and a Verification phase. Successful traders may then receive funded accounts with profit splits up to about 90%. The firm enforces strict daily loss and maximum drawdown limits but imposes no special restrictions against hedging.
The5ers
The5ers supports hedging notably in both normal and swing funding account models. Traders may run offsetting trades on correlated instruments. The evaluation is generally one-step, and there is no fixed deadline for achieving targets. Profit sharing can reach approximately 95%. Risk management rules, including drawdown thresholds, apply equally in hedged strategies.
FundedNext
FundedNext has lifted its corporate restrictions on hedging, allowing traders to hold long and short positions concurrently across all account types. Risk rules and drawdown limits remain in place. The evaluation model is simplified, and traders can benefit from scalable funding tiers with hedging permitted at every stage.
Blue Guardian
Blue Guardian allows hedging as part of its risk management flexibility. Traders may enter counterbalancing trades on similar assets. The firm uses a flexible evaluation process and does not restrict strategies. Provisions exist for trading across multiple instruments and lot sizes, subject to conventional risk constraints.
Common Features Across Firms
Account Types and Platforms
Platforms used by these firms typically include MT4, MT5, and similar trading environments. While hedging may be allowed, some platforms—such as MT4—require specific account configurations to enable hedging due to default settings. Instruments commonly allowed include Forex pairs, CFDs, and commodities for hedged trading.
Evaluation and Funding
These firms offer either one-step or multi-step challenges. Targets and risk rules are well-defined. Once funded, traders receive their capital allocation and a profit split structure. Hedging remains permitted throughout and is compatible with expert advisors or automated strategies.
Risk Rules
Each firm enforces daily loss limits, percentage drawdown caps, and maximum position size mandates. Traders utilizing hedged positions must remain compliant. Excesses—even in hedged positions—can result in account termination.
Scalability
Several firms support account scaling based on performance. Scaling triggers may include profit thresholds or consistency metrics. Hedging remains permitted at larger account levels, but proportional risk controls apply as the capital size grows.
Comparison Table
| Firm | Hedging Permission | Evaluation Phases | Profit Share | Strategy Flexibility |
|---|---|---|---|---|
| FTMO | Yes | Two-phase (Challenge + Verification) | Up to ~90% | Supports hedging and EA use |
| The5ers | Yes | Single-phase or swing | Up to ~95% | No time limits; hedging allowed |
| FundedNext | Yes | One-phase evaluation | Scalable splits | No hedging restrictions |
| Blue Guardian | Yes | Flexible evaluation | Standard model | Hedging and arbitrary strategies allowed |
Ideal Trader Use Cases
Traders who benefit from hedging at these firms typically:
- Use market-neutral or arbitrage strategies that mitigate directional risk.
- Open correlated positions to offset volatility in one instrument with another.
- Deploy expert advisors or automated systems managing risk on both sides.
- Prefer full strategy flexibility, including scalping, hedging, and trade automation.
Important Considerations
- Platform configuration: ensure the trading platform/account supports hedging explicitly.
- Risk rule compliance: hedged strategies still must observe maximum drawdown and daily loss limits.
- Instrument coverage: confirm which instruments are eligible for hedging in funded accounts.
- Account scaling: understand how hedging interacts with scaling thresholds and profit tiers.
Conclusion
A curated selection of proprietary trading firms explicitly permit hedging as part of funded trading models. Firms such as FTMO, The5ers, FundedNext, and Blue Guardian offer flexibility for hedged strategies under controlled risk frameworks. Traders must ensure that account and platform selections support hedging, and they must consistently comply with risk rules while executing offsetting positions.
