NFA - "No more Limit or Stop Loss orders" | Forex Factory

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NFA - "No more Limit or Stop Loss orders"

  • #1
  • First Post: Jul 2, 2009 8:08am Jul 2, 2009 8:08am
I received the following email from my broker. Does anyone have more information about this, or can direct me to a thread that's already dicussing this topic?
Thanks.


A major new National Futures Association (NFA) rule goes into effect on August 1, 2009. This rule affects all U.S. regulated Forex Dealer Members. Forex traders will no longer have the ability to place stop-loss or limit orders. Nor will traders be able to modify or close trades from the “Open Positions” window. As these features will be removed, all stop-loss and limit orders held on FXCM LLC accounts at the close of trading on July 31, 2009, will be deleted.


ALSO...


The NFA, our industry’s self regulatory organization in the United States, has adopted Compliance Rule 2-43(b). Read Compliance Rule 2-43 (b). This rule requires orders be executed First In, First Out (FIFO). FIFO requires that when multiple positions are held in the same currency pair, the position which was first opened will be the first to be closed. Stop-loss and limit orders do not comply with FIFO.
Money Talks - Wealth Whispers . . .
  • #2
  • Jul 2, 2009 8:21am Jul 2, 2009 8:21am
I am at a loss to understand why NFA is doing all this, except to say that they are trying to kill all FOREX speculators (retail traders).

Every good trader and trading method starts with money management and the motto "always place a stop loss when you enter a trade to control your risk."

Now they are taking this away! WTF?

Forex as we knew it is OVER.

Guess I'll start looking into binary options.

Thanks OBAMA and all you SOCIALIST MF's

Mad as hell, Madmax!
  • #3
  • Jul 2, 2009 8:23am Jul 2, 2009 8:23am
What about if you deal with a European broker?
  • #4
  • Jul 2, 2009 8:25am Jul 2, 2009 8:25am
what the hell thats retarded, the death of US brokers with that rule there
Grabbing the bull by the horns!
  • #5
  • Jul 2, 2009 8:30am Jul 2, 2009 8:30am
This rule applies only to US brokers.
  • #6
  • Jul 2, 2009 8:33am Jul 2, 2009 8:33am
Though SL and TP functionality is gone, one can mimic them with the use of entry orders. For example, if original order was BUY, the use of SELL entry for SL and TP is possible. Cumbersome, ridiculous. But, better than no SL at all.
  • #7
  • Jul 2, 2009 8:33am Jul 2, 2009 8:33am
My understanding is that this new rule applies only to US Brokers falling under the NFA.

I have a US account at FXCM and they are offering me to transfer to FXCM(UK) so I will not be affected, however at this new site I will face significant withdrawal charges, so I am still considering what to do.

I hope that helps. Madmax
  • #8
  • Jul 2, 2009 8:35am Jul 2, 2009 8:35am
For those upset with NFA rulings, wait until you read this:

http://www.nfa.futures.org/news/PDF/...Notc021909.pdf

No more 400:1 leverage. Not that I support that kind of leveraging, but this might push many brokers to the brink.
  • #9
  • Jul 2, 2009 8:38am Jul 2, 2009 8:38am
Please correct me if I am wrong but isn't banning limit orders going to prevent you from entering those "entry" orders you are referring to?

Wouldn't they be considered "limit" orders?

Madmax
  • #10
  • Jul 2, 2009 8:39am Jul 2, 2009 8:39am
people please complain to the N.F.A. if they hear your conplaints they will linsen to you.
  • #11
  • Jul 2, 2009 8:47am Jul 2, 2009 8:47am
I doubt they will listen we are a thorn in their side. Ever since the stock market and housing market collapse they have been trying to BLAME speculators.

First, no more short selling stocks, now all this. They won't accept the responsibility for their mismanagement and lack of proper policies that led to these horrific declines so they want a scapegoat.

Remember the adage: "People won't believe the little lie but will believe the big one."

This is what they want "average Joe" to believe: Speculation caused all of our problems, so let's just eliminate speculators, and all will be well.

LOL, Madmax
  • #12
  • Jul 2, 2009 8:49am Jul 2, 2009 8:49am
Quoting Madmax1952
Please correct me if I am wrong but isn't banning limit orders going to prevent you from entering those "entry" orders you are referring to?

Wouldn't they be considered "limit" orders?

Madmax
The only way to close a BUY order that is running would be to open a SELL order for an equal amount.

Banning entry orders is only in the sense that you can't place SL and TP that is associated with an existing order. You can place an entry SELL order for same amount as BUY so that when that level is hit, SELL order would activate. Since BUY and SELL can't exist together (no hedging policy in US), SELL would close BUY.

http://forexforums.dailyfx.com/nfa-f...s-answers.html
  • #13
  • Jul 2, 2009 8:49am Jul 2, 2009 8:49am
Quoting Madmax1952

Thanks OBAMA and all you SOCIALIST MF's

Mad as hell, Madmax!
exactly F*** OBAMA!!
  • #14
  • Jul 2, 2009 8:51am Jul 2, 2009 8:51am
OK, that makes sense. Thanks. Madmax
  • #15
  • Jul 2, 2009 9:07am Jul 2, 2009 9:07am
I have no doubt they will come to pass. One more "nail in the coffin" designed to kill "speculators."

It just goes to show how little they understand and how frightened they are that the truth may come to light about their role in this mess.

Speculators are a "good thing" not a "bad thing," they provide additional liquidity and their stops and limits (now banned) provided a counter weight to help markets rebound or debound (is that a word?) whatever the case may be.

Remove them from the equation and there is nothing to stop a freefall, as we saw in the stock market. After banning short sales the market nose-dived with no safety net.

Remember the "Big Lies" adage.

Madmax
  • #16
  • Jul 2, 2009 9:19am Jul 2, 2009 9:19am
Hi Snow and all,

While stops and limits on individual tickets will not be allowed, FXCM will be releasing an update to the FX Trade Station II the weekend of August 1 that will add OCO orders to the platform. That way you can still manage the risk on your trades.

The OCO order will allow you to create entry orders to replicate a stop/limit and will then close out your open position according to FIFO. The stop/limit functionality itself is being removed since it would allow you to close trades in any order.

If you don't want to be incovenienced by this, then transfer to FXCM UK. You will be able to close trades in any order, have hedging available, and OCO's for entry orders will be available on the FXCM UK platform as well.

-Jason


Quoting * Snow *
I received the following email from my broker. Does anyone have more information about this, or can direct me to a thread that's already dicussing this topic?
Thanks.


[font=Arial]A major new National Futures Association (NFA) rule goes into effect on August 1, 2009. This rule affects all U.S. regulated Forex Dealer Members. Forex traders will no longer have the ability to place stop-loss or limit orders. Nor will traders be able to modify or close trades from the “Open Positions” window. As these features will be removed, all stop-loss...
  • #17
  • Jul 2, 2009 9:27am Jul 2, 2009 9:27am
Quoting Madmax1952
My understanding is that this new rule applies only to US Brokers falling under the NFA.

I have a US account at FXCM and they are offering me to transfer to FXCM(UK) so I will not be affected, however at this new site I will face significant withdrawal charges, so I am still considering what to do.

I hope that helps. Madmax
Hi Madmax,

The withdrawal charges are the same for FXCM UK.

-Jason
  • #18
  • Jul 2, 2009 9:40am Jul 2, 2009 9:40am
ok this is what ibfx has to say about this. hope this helps. from what i gather you can place a stop as long as its a different lot size.

"We are currently working on some informational and instructional videos regarding the FIFO requirements and our solution, however most traders will be able to continue trading without any impact to their platform or strategies. In our effort to provide the best solution for your trading, you will be fully advised prior to any proposed changes. It is also good to note that if you have more than one position in the same currency pair and the exact same lot size than you will not be able to place a stop loss or take profit on the trades that you placed previous. However, if the trades that you placed on the same currency are slightly different, for example you have 3 buys on the eur/usd one for 1.50 lots, onther for 1.51 lots and another for 1.52 lots, then the FIFO rule does not apply and you are able to place stop losses and take profits on those trades freely."
  • #19
  • Jul 2, 2009 9:48am Jul 2, 2009 9:48am
If people properly understood FIFO they would understand why the first post in this thread (FXCM's explanation) is a gross exaggeration and completely retarded re: limit and stop orders. Pretty sure FXCM just wants their customers to move to their UK subsidiary, because they've put out some downright stupid news releases in the past two months regarding the new NFA rules.

If you don't understand FIFO, I guess the first post would probably freak you out, in which case I advise you to read up on how FIFO works and why this ruling doesn't mean you now have to sit and monitor your trade the whole time.

Basically FXCM is trying to scare you into moving to their UK division. Nice going dudes, looks like it's working
  • #20
  • Jul 2, 2009 9:50am Jul 2, 2009 9:50am
I have an account with both IBFX and FXCM.

I tried to enter different lot sizes in the same direction in my FXCM account and when I closed one of them it defaulted to FIFO in spite of the different lot sizes.

NOT HAPPY.

Madmax
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