Proposal to phase out NFA | Forex Factory

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Proposal to phase out NFA

  • #1
  • First Post: Apr 16, 2009 5:43pm Apr 16, 2009 5:43pm
NFA is not protecting the clients, but is protecting the brokers from traders and from other aggressive competition brokers.

What has it done for you? You complaints filed against brokers were never listened to unless those complaints are about "false advertisements" were other brokers would like to hear as well. Complaints about bad fills, slow execution, stop hunting, wrong price, exorbitant commissions/spreads are never heard. Traders who file claim against brokers are never processed as well. Have you heard about FXQL clients for instance? Broker claim they have the money, and NFA still shuts them down so you cannot withdraw your funds. Go Figure!

We just got this NO HEDGE rule coming by May 15.
And what another rule to limit leverage down to 1:25?
Maybe they will come up with other rules like No Profit allowed?

Bottom Line: NFA is here to screw us.
  • #2
  • Apr 16, 2009 5:54pm Apr 16, 2009 5:54pm
Quoting ragnakore
Maybe they will come up with other rules like No Profit allowed?

Bottom Line: NFA is here to screw us.
You could be right... no profit allowed = socialism.

They have just socialized the banking system, so why not Forex?
In the days of old when sailors were bold, and seldom if ever contented.
  • #3
  • Apr 16, 2009 11:09pm Apr 16, 2009 11:09pm
any recommendation for non NFA broker ?
  • #4
  • Apr 17, 2009 12:27am Apr 17, 2009 12:27am
My understanding is that FXLQ customers received 100% of their funds.

The reason for the shutdown was fraudulent activites concerning FXLQ's Capital.

http://www.robbevans.com/html/forexlq.html
  • #5
  • Apr 17, 2009 1:24am Apr 17, 2009 1:24am
I think FXLQ accounts settiled for a % of what thay had after a year of waiting!! I know guys still waiting for their oneworlds $ but not a peep out of the NFA/CFTC for over 2 years!!
  • #6
  • Apr 17, 2009 1:53pm Apr 17, 2009 1:53pm
Hedging is not allowed in a single account but you can have opposite trades in two different accounts. The current model adopted by Oanda will survive. I bet the others will simply allow the customers to have more than one accounts anyway.

Regarding the leverage limit, I strongly disagree, even though I personally trade 1:1 only.
  • #7
  • Apr 17, 2009 5:55pm Apr 17, 2009 5:55pm
Quoting jlryan87
I bet the others will simply allow the customers to have more than one accounts anyway.
All brokers have ALWAYS allowed you to have more than one account.
In the days of old when sailors were bold, and seldom if ever contented.
  • #8
  • Apr 17, 2009 7:38pm Apr 17, 2009 7:38pm
Why anyone would think that brokers like this rule is beyond me. Who do you think created so called "hedging"? BROKERS.
  • #9
  • Apr 18, 2009 2:54am Apr 18, 2009 2:54am
Conspiracies arise most when people can't make money trading. I guess you have to take your frustrations and limitations out on something.
----- I live in the land of Trading Metro.
  • #10
  • Apr 18, 2009 11:44am Apr 18, 2009 11:44am
Quoting socialtrader
Conspiracies arise most when people can't make money trading. I guess you have to take your frustrations and limitations out on something.
I am frustrated! Frustrated that I have to read yet another useless post that says nothing! (like this one too).
FF = Forex Faggots
  • #11
  • May 3, 2009 7:10am May 3, 2009 7:10am
Quoting jlryan87
Hedging is not allowed in a single account but you can have opposite trades in two different accounts. The current model adopted by Oanda will survive. I bet the others will simply allow the customers to have more than one accounts anyway.

Regarding the leverage limit, I strongly disagree, even though I personally trade 1:1 only.
1'st broker I thought about to join live was Oanda due to lower spreads:

Guess why i didn't:

1- they didn't alowed hedging
2- to many disconnections
3- spreads increase at times like hell
4- NO metatrader


About this NFA no hedging rule :
Someone ( NFA ) is limiting the options someone else has ( traders ) and that is claimed as beeing "help" ?!


About NFA first in first out rule , it makes forex a mess : now you will have to think :

oH boy , I am allowed to close this position ??
oh no , I am not allowed , I have to close the other one first ...


NFA should protect traders by not allowing so many REQUOTES , OFF QUOTEs, and other errors which appear when you want to close a winning trade , why these errors appear mostly on winning trades ?

Also protect us against stop hunting , over-slippage and artificial -broker spikes which are obvious when comparing quotes with an ECN broker, NFA please don't protect me against a lousy 3 pips spread, it's RIDICULOUS.

And after all is MY money , I should be able to trade how i want with my money.

Brokers still allowed to hedge al clients positions , right ? ..of course...is that not bad "for economy" ( NFA said hedging is not good for economy ) or only when traders are hedging is bad, who are the big hedgers brokers or traders...this rule protect brokers obviously brokers and is against traders...
  • #12
  • May 3, 2009 12:04pm May 3, 2009 12:04pm
All regulatory agencies are the same. They limit the self regulatory power of the market by replacing it with a less efficient form of regulation and drive out small and aggressive competitors by creating legal barriers to entry, thereby driving up costs for the consumer.
  • #13
  • May 3, 2009 2:11pm May 3, 2009 2:11pm
Quoting Redox77
1'st broker I thought about to join live was Oanda due to lower spreads:

Guess why i didn't:

1- they didn't alowed hedging
2- to many disconnections
3- spreads increase at times like hell
4- NO metatrader


About this NFA no hedging rule :
Someone ( NFA ) is limiting the options someone else has ( traders ) and that is claimed as beeing "help" ?!


[color=black][font=verdana]About NFA first in first out rule , it makes forex a mess : now you will have...
looks like NFA is doing all things to keep we away from making profit from Forex.

hedging: We trader are using it for protecting our position against opposit move of market maker against our position by taking hedge position. now they want to take losses.

another is some FIFO orders rules.: we were averaging position and closing positions as it becomes profitable..now they want us to close first position first and take losses...

It is confusing what exactly NFA doing....
Only way to get ride of these NFA rules is to shift accout out of NFA regulated broker since for us (trader ) it will be difficult to make any proft from NFA regulated broker.
only way i see is shifting to FSA regulated broker.
  • #14
  • May 3, 2009 2:57pm May 3, 2009 2:57pm
Quoting ramdas
only way i see is shifting to FSA regulated broker.
I'm doing the opposite, moving from an FSA regulated broker to an NFA regulated one!

'Hedging' by having opposite positions on the same pair isn't financially beneficial, I can't think of one professional trader who does it.

FIFO doesn't make any difference to bottom line profit/loss, NAV is the same whichever way you close your trades.

'Compliance Rule 2-43(a) will prohibit an FDM from adjusting executed customer orders', now that's the reason I'm moving, no more busted trades!

Finally NFA are doing something for the retail forex trader, and it's about time!

If you think for a minute the FSA are going to protect you from broker's tricks then think again!
  • #15
  • May 3, 2009 8:28pm May 3, 2009 8:28pm
Quoting pipmutt
Finally NFA are doing something for the retail forex trader, and it's about time!

If you think for a minute the FSA are going to protect you from broker's tricks then think again!
If you think for a minute the NFA are going to protect you from brokers' tricks then think again!

Nothing they're doing is beneficial to forex traders. They'll simply be limiting competition, thereby driving up spreads while providing no real protection.
  • #16
  • May 4, 2009 1:23am May 4, 2009 1:23am
Quoting krazy kaju
If you think for a minute the NFA are going to protect you from brokers' tricks then think again!

Nothing they're doing is beneficial to forex traders. They'll simply be limiting competition, thereby driving up spreads while providing no real protection.
Compare the two and you'll soon see NFA are doing a whole lot more than the FSA that's for sure!

How can you call prohibiting non-STP brokers from reversing profitable trades not 'beneficial to forex traders' or not 'real protection', it's an extremely beneficial rule and offers the trader some very real protection. Increasing minimum capital requirement weeds out the under financed FDM's who are more likely to go broke taking your cash with them. As far as competition goes there will always be competition among marketmakers because it's such a lucrative business for them, don't worry spreads will remain as competitive as the underlying market allows.

It's obviously up to the individual where he trades and where he thinks he's going to get the best deal with the best protection, but at least make an informed decision!
  • #17
  • May 4, 2009 7:20am May 4, 2009 7:20am
Quoting pipmutt
I'm doing the opposite, moving from an FSA regulated broker to an NFA regulated one!

'Hedging' by having opposite positions on the same pair isn't financially beneficial, I can't think of one professional trader who does it.

FIFO doesn't make any difference to bottom line profit/loss, NAV is the same whichever way you close your trades.

'Compliance Rule 2-43(a) will prohibit an FDM from adjusting executed customer orders', now that's the reason I'm moving, no more busted trades!

Finally NFA are doing something for the retail...

I think for stp firms that's a really good rule, if a firm intends to cancel/adjust a trade it has to be done in a timely fashion, not HOURS after the trade, like some firms did. If a firm cancels a trade this late, it has lots of unforseen consequences for the trader (like, if you cancel the first trade of a serie, it could change all subsequent trades from long to short and vice versa, and leave a trader with open-ended exposure while he thinks he closed all positions).

I think its a bit hard on marketmakers tho. If you allow the possibility of erroneous fills on ecn platforms, it should also be allowed on mm platforms, since its not always in their hands what their 3rd party price-makers do. In case of a price-spike, they would have to compensate all fills from stop-loss orders, while eating all trading-profits on this price that may be several hundred pips off-market - and it may not even be their fault. For example Oanda, who in my experience handled these situations in a very fair manner(although not always very timely), may have to adjust. Maybe they will just let such a spike stand and don't adjust trades at all, if they have to pay the profits they probably don't want to compensate the losses. That would be worse than the status quo.
  • #18
  • May 4, 2009 7:51am May 4, 2009 7:51am
Quoting pipmutt
I'm doing the opposite, moving from an FSA regulated broker to an NFA regulated one!

'Hedging' by having opposite positions on the same pair isn't financially beneficial, I can't think of one professional trader who does it.
LOL . i know a couple of profes. traders who use hedging , where did you came up with that

So then why brokers use hedging ? Brokers take opposite positions of all of our orders.
  • #19
  • May 4, 2009 7:56am May 4, 2009 7:56am
Quoting pipmutt
If you think for a minute the FSA are going to protect you from broker's tricks then think again!

ha ha..if you think NFA is going to protect you ....you will be dissapointed.
Why NFA doesn't take action about all complaints about requotes, offquotes, artificial disconnections !!! and stop hunting, artificial spikes ...
  • #20
  • May 4, 2009 8:23am May 4, 2009 8:23am
Quoting shrike
I think its a bit hard on marketmakers tho. If you allow the possibility of erroneous fills on ecn platforms, it should also be allowed on mm platforms, since its not always in their hands what their 3rd party price-makers do....
I can't argue with that, you make a very good point. It seems NFA have gone from one extreme (by up until now allowing marketmakers a free hand to do pretty much whatever they like) to the other extreme (making them honour every fill regardless), it will be interesting to see how marketmakers react and what steps they take to protect themselves. I'm surprised they didn't petition for the same rules to apply to them as will apply to STP brokers, perhaps they did? They could be required to provide documentary evidence of mispricing in a timely fashion just the same, and it would be just as effective against unscrupulous brokers as banning reversals altogether.

I almost feel sorry for the honest ones who have played it reasonably straight and done their best to provide a reasonable service.....then I remember just how much of my money they took in the past and suddenly I don't feel so sorry any more!
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