Hedging is holding opposite positions on the same instrument at the same time: long and short together. The two positions partly cancel each other, so the net exposure is smaller than either position alone. Some firms allow it, some ban it outright, and some allow it within one account but ban it across two accounts. Audacity Capital prohibits hedging within or across accounts, while Blueberry Funded prohibits external hedging but allows hedging within the same trading account.
The cross-account version is where traders get caught. Opening a long on one account and a short on another locks in a pass on one of them whatever the market does, which defeats the point of an evaluation. Firms treat that as rule abuse, and they detect it from matching orders across accounts, not from anything the trader declares.
This matters because hedging feels like risk control but can read as cheating. A trader hedging inside one account to manage an open position is doing something different from a trader hedging across accounts to guarantee a pass, and firms judge the two differently.
The common trap is assuming hedging is either always fine or always banned. Check the hedging policy on the rules page for your plan, including whether it covers one account, several accounts, or both, before you open the second side. Prop trading can cost you every fee you pay.