Many retail traders are shocked to discover that their trading strategy—especially if it’s profitable—is suddenly flagged as “unacceptable” by their broker. This deceptive practice, known as the strategy conflict with broker model scam, is how some brokers protect their own bottom line by punishing traders who simply play the game well. The scam hides behind vague terms and selective enforcement, but the outcome is always the same: traders are penalised, profits withheld, or accounts terminated for using legal, effective strategies.

How the Scam Works

This scam stems from a conflict of interest in the broker’s internal dealing model. Most retail brokers operate as market makers, meaning they take the opposite side of your trade. If you win, they lose.

When a strategy consistently outperforms or exposes the broker’s weaknesses, they claim it “violates trading conditions” or “conflicts with our execution model.”

Here’s how it typically plays out:

1. Profitable Strategy Triggers a Review

Once your strategy starts generating consistent profits—particularly through:

• Scalping
• Arbitrage
• News trading
• Grid or hedging systems

—your trades may be flagged by the broker’s risk department.

2. Broker Claims a Policy Violation

They may contact you with statements like:

• “Your strategy is not allowed under our trading conditions.”
• “You are exploiting price feeds or latency.”
• “This behaviour conflicts with our liquidity provider agreements.”

Often, these policies are not clearly defined in the public terms and are subject to the broker’s interpretation.

3. Profits Are Cancelled or Accounts Blocked

In the worst cases, traders report:

• Profit reversals: Profits removed from account history retroactively
• Trade cancellations: Winning trades declared “invalid” due to execution model conflict
• Account bans or freezes: No withdrawals permitted until an “internal investigation” is complete

4. No Recourse or Appeal

When you challenge the decision, the broker may reference vague clauses like “abuse of the trading platform” or “unfair trading practices,” leaving you powerless.

Real Example: Broker Rejects News-Based Strategy

A trader uses a pending order strategy around major economic releases. After three successful NFP trades in a row, earning over $2,000, the broker sends a warning that “news trading is not permitted under our execution model.” The profits are reversed, and the trader’s account is suspended.

No prior warning or specific clause in the terms ever mentioned that news trading was forbidden.

Why This Scam Is So Harmful

This tactic destroys the core of fair trading by:

• Punishing skill and performance
• Creating uncertainty about what is “allowed”
• Allowing brokers to act as judge, jury, and executioner

It particularly affects systematic traders and algorithm developers who rely on consistency and predictability.

What Strategies Are Often Targeted

Brokers often target:

• Scalping: They claim it overloads servers or “distorts liquidity”
• Latency arbitrage: Accused of exploiting price delays
• Hedging/Grid strategies: Seen as risk-averse and hard for brokers to manage
• EA/robot usage: Flagged if it’s too effective or fast

How to Protect Yourself

1. Ask in Writing Before Trading

If you use any defined strategy (scalping, hedging, EA), email support and ask:

“Is my strategy permitted on this account type under your trading model?”

Get the reply in writing.

2. Choose Brokers with Transparent Execution

Brokers with true STP or ECN models have no incentive to stop profitable strategies. Their profits come from volume, not client losses.

3. Read Terms and Conditions Carefully

Look for vague clauses like:

• “We reserve the right to cancel trades at our discretion.”
• “Abusive trading practices are not permitted.”
• “Strategies conflicting with our liquidity model will be removed.”

These are red flags.

4. Test With Small Accounts

Start small, test the broker’s tolerance to your strategy, and check if slippage or execution changes after a winning streak.

5. Document Every Step

If your trades are reversed or profits cancelled, request:

• Full trade logs
• Recorded communication
• A formal reason for the action

This may be needed for complaints to regulators.

Conclusion: Avoid the Strategy Conflict with Broker Model Scam

The strategy conflict with broker model scam is one of the most dishonest tactics used by some brokers to protect their own interests at the expense of trader success. It turns profitability into a liability and leaves traders vulnerable to arbitrary penalties. The solution is vigilance—question broker policies, demand clarity, and never trade with a platform that punishes you for winning.

To learn how to identify broker traps and choose the right trading partner for your strategy, enrol in our expert-led Trading Courses and equip yourself with the tools to win fairly and sustainably.