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NFA - "No more Limit or Stop Loss orders"

  • #101
  • Jul 3, 2009 7:48pm Jul 3, 2009 7:48pm
Remember Australia would be another good option depending on exchange rates.

Here is another thread about australian brokers which may help...

http://www.forexfactory.com/showthread.php?t=105986

Email from one of the brokers I use:

Dear Client,

Following a number of customer enquiries regarding the new NFA regulations on hedging, FIFO and the placement of stop loss and limit orders, allow us to confirm that we are not regulated by the NFA and only by ASIC. Accordingly, we are not required to comply with these restrictions and your trading is able to carry on as normal.

To confirm, you are able to hold hedge positions, place stop loss/take profit orders and close trades in any desired order.

Updated Overnight Trade Execution Number:
Please note the phone number for calling our overnight trading desk has changed to be #################.
As always this number is not for customer service and is for only instant trade execution.

If you have any further questions, please do not hesitate to call.

Regards,
Go Markets
  • #102
  • Jul 3, 2009 8:34pm Jul 3, 2009 8:34pm
Quoting wwwin
not 1:50 or 1.25 but 1.5:1
http://www.askdamagex.com/f19/finra-...everage-34789/
that's FINRA and not NFA!
Fay All Time Return: -98.7%
  • #103
  • Jul 3, 2009 8:40pm Jul 3, 2009 8:40pm
FXDD has offices outside of the US and don't have to march to the beat of the United Socialist States. The banking failures were a blessing to Obama and his cronies to regulate businesses. I just may switch from IBFX to FXDD, just on principle. Leverage of 50 to 1 is more than I need or use, but if they go 5 to 1, I'm outta the Unites Socialist States.
Quoting pipsr4kids
IF YOUR in the us try fxdd, they haven't be affected by any of the new regulations, you can still hedge trade with them.
  • #104
  • Jul 3, 2009 9:51pm Jul 3, 2009 9:51pm
Well, getting rid of SLs is just weird. This is something that you can do everywhere, with every broker. I am really getting close to ditching FX brokers all around any how. With those ETNs/ETFs available through the stock brokers, why even bother?
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #105
  • Jul 3, 2009 11:00pm Jul 3, 2009 11:00pm
Oh for pete's sake. This doesn't ban stop losses or limit orders. It requires a FIFO system for all active market orders (positions), or when a limit/stop order converts to a market order (changes a position). It has no impact on non market orders. Seriously guys, you need to get a better lawyer.

That means if you had a stop loss on one trade and had none on the other, and both trades were comparable lot sizes, then the first trade would be closed.

The exact wording is:
"Forex Dealer Members may not carry offsetting positions in a customer account but must offset them on a first-in, first-out basis."

Says NOTHING about orders, only that no offsetting position can be held (cannot hold, but you can make, just not hold both a long and a short POSITION at the same time), but rather a FIFO net position must be reflected in an account. Again, this says nothing about being unable to take a long when you're short, and has nothing to do with non-market orders. It's just that when it comes to tallying the net position, the FDM cannot have both a short position and an offsetting long position.

As for leverage, FINRA has no jurisdiction over forex. It's a securities regulator (used to be the NASD). If a company offers both securities and forex thru the same company, then yes they'd be tied to the regulation. But nobody does, they just open up a 2nd company and register it with the NFA instead. Basically the leverage rule just says "We don't want to regulate this, so we're making it next to impossible for you to offer this product thru your FINRA registered operations."

As for the NFA, there's some discussions about limiting leverage to numbers like 100:1 and 25:1, none of which should even remotely be a problem. The level of FUD in this thread is just insane.
  • #106
  • Jul 3, 2009 11:12pm Jul 3, 2009 11:12pm
Seriously I think NFA just wants all retail traders to stop using US brokers.
  • #107
  • Jul 3, 2009 11:17pm Jul 3, 2009 11:17pm

I reckon, there are always some alternative options for US traders, like an offshore account for instance.


http://o.b5z.net/i/u/10015464/i/Go-M...w-Logo-250.gif
The NFA (US regulator) have placed several new restrictions on FX trading recently, including the banning of stop loss orders and hedging.
Go Markets are an Australian regulated company and are not required to comply with NFA regulations.
Go Markets is using MetaTrader4 with FX spreads as low as 0.5 pips and with micro lots available. Use Stop loss and limit orders without exception.
Start trading today with micro FX contracts from as low as 10 cents a pip! We are pleased to announce the launch of Swap-Free (islamic) accounts.
Clients will be able to trade in all Forex Majors and Minors without exposure to Forex swap/rolls.
We are pleased to offer a 10% credit bonus to all first time deposits. Clients who deposit funds with us will receive up to $250 credit on the first deposit.
MetaTrader4 offers:
FX spreads from as low as 0.5 pips,
100% straight through processing,
No dealer intervention or requotes,
Full, unrestricted use of Expert Advisors,
No hedging restrictions,
Swap Free accounts,
Mini/Micro lots available,
Leverage up to 300:1,
No minimum account balance.
GOMarkets Pty Ltd | Level 16 | 114 William Street | Melbourne | VIC 3000


[color=#006600][font=Verdana][email protected]Free Phone: 1800 88 55 71 | Phone: +61 3 9670 3055 | [/color][/font]

  • #108
  • Jul 3, 2009 11:24pm Jul 3, 2009 11:24pm
Quoting fayz0r
that's FINRA and not NFA!
yes, but FNA will be next,
  • #109
  • Jul 4, 2009 2:01am Jul 4, 2009 2:01am
If you live in the U.S. and switch your account to the U.K., you will be greatly increasing the complexity of your tax filings.

You would be better off leaving your account in the U.S. and learning to use OCO entry orders as stops and limits on open positions.

It is not complicated. Believe me, if you can't figure it out, the market is going to eat you soon enough anyway.

Happy Trading.
  • #110
  • Edited 9:00am Jul 4, 2009 2:28am | Edited 9:00am
The US regulators are all paranoid and in order to make a show that they are regulating the markets they have unnecessarily banned hedging. This is ridiculous. A simple notification on applications forms "Hedging may not be in the best interest of some investors. Use with proper understanding" would have been more than sufficient.
There is corruption in the marketplace but it's not the speculators. A speculator is a rugged individual type person. Regulators have to act like dancing dogs for the boss. So who is more inclined to be corrupt. The street smart speculator, who know what goes around comes around.
Or the brown nosed regulator? Bending truths to try to make things come out to look good? Job security.
We need regulators. This is true otherwise, all sorts of maniacs would overrun the place, visa vis Maddoff and company, but that's what we need regulators for, to root out these guys.......Not speculators. Since the US regulators in a variety of government agencies have been asleep at the switch for years, they want to crucify the innocent speculators to divert attention from their miserable failure at doing their real job.
Now they think 2 wrongs will make everything right.
What else is new? Ignorant fools.
I've switched to London FXCM. Hedging the same pair is a major part of my scalping strategy.
http://www.forexfactory.com/showthread.php?t=180544
  • #111
  • Jul 4, 2009 2:38am Jul 4, 2009 2:38am
Quoting DareXau

I reckon, there are always some alternative options for US traders, like an offshore account for instance.



[center]http://o.b5z.net/i/u/10015464/i/Go-M...w-Logo-250.gif
The NFA (US regulator) have placed several new restrictions on FX trading recently, including the banning of stop loss orders and hedging.
[font=Trebuchet MS][font=Verdana][size=2]Go...
you may need an Aussie bank account to join with them...
Grabbing the bull by the horns!
  • #112
  • Jul 4, 2009 5:55am Jul 4, 2009 5:55am
Quoting Pipvalhalla
I'm just moving all of my accounts to the UK and Australia where trading freedom still rings! Next the NFA will mandate 1:1 leverage. Cool, so now it will take $100,000 to make 5 bucks, in other words they want to shut down the little guy. I thought this country was about dreams and how the little guy can rise up and be successful, and this country was about setting up an environment where that was possible. Not anymore. Everything is geared towards the wealthy now. This has happened before. I was finally learning how to daytrade stocks and was...

I 'll take this as just another challenge in life. Every now and then when U think ur life could be going on smoothly, one problem or the other creeps in and rocks the boat. We 've got two choices ; either we sit there moaning and complainning to whoever cares to listen or we use our head and think of a way out of, or around our problems.
From experience, complianing or critising big Dogs like the NFA (and other regulatory bodies) doesn't really change their decisions.
Because they believe they've got the best analysts, strategists, financial advicers ... etc working for them and they are sure to make the smartest and best decisions/policies.

But it's obvious they are not as smart as they think; if not the US economy would not be in shambles as it is today.

In a nutshell instead of complaining, try and rise up to the challenge, because it's ur financial freedom/future that's at stake here.

Either you adapt to using OCO, or change to a reliable broker outside the US that allows you to trade the way you feel will be beneficial to you . At least we can survive with that for now untill all brokers (outside the US) decide to adopt the same policy. Then we'll think of another way out.

SINCE HUNTERS HAVE LEARNT TO SHOOT WITHOUT MISSING, BIRDS HAVE LEARNT TO FLY WITHOUT PERCHING


Please don't hang around and trade without a STOPLOSS and lose good money . It's your money, not the NFA's.

Thanks
  • #113
  • Jul 4, 2009 6:43am Jul 4, 2009 6:43am
Quoting bassmouth
If you live in the U.S. and switch your account to the U.K., you will be greatly increasing the complexity of your tax filings.

You would be better off leaving your account in the U.S. and learning to use OCO entry orders as stops and limits on open positions.

It is not complicated. Believe me, if you can't figure it out, the market is going to eat you soon enough anyway.

Happy Trading.
Would you mind explaining how to OCO in breakout strategy...!?!
for example you have a candle high and low...and you want to put a pending stop buy and sell on the high and the low of the candle...with stop loss and target profit....so how you can replace all these by using OCO...?? thank you...
  • #114
  • Jul 4, 2009 7:22am Jul 4, 2009 7:22am
cool down guys, i think that its just a rumour, sop losses are part of the game, they can't forbid that, or forex is over............
  • #115
  • Jul 4, 2009 7:27am Jul 4, 2009 7:27am
The UK always does what the Americans do, so i dont think it will be long before the FSA also implements this changes.

There was a thread started 2 years ago about Governments not wanting retail forex to exist.
  • #116
  • Jul 4, 2009 8:49am Jul 4, 2009 8:49am
Very good explanation. Obvious you know what you're talking about, and 99% of forex traders won't be affected. All much ado about nothing. Nice to have someone who has checked into this make a detailed post.
Quoting Rabid
Oh for pete's sake. This doesn't ban stop losses or limit orders. It requires a FIFO system for all active market orders (positions), or when a limit/stop order converts to a market order (changes a position). It has no impact on non market orders. Seriously guys, you need to get a better lawyer.

That means if you had a stop loss on one trade and had none on the other, and both trades were comparable lot sizes, then the first trade would be closed.

The exact wording is:
"Forex Dealer Members may not carry offsetting positions in a customer...
  • #117
  • Jul 4, 2009 8:59am Jul 4, 2009 8:59am
Quote
FIFO does concern SL and TP, because if you have 2 trades open, and have large SL and TP and the first trade, and small SL and TP on the second, then the second order will close before the first, and FIFO does not allow that...Just wait and see, it is just that FXCM discussed it before the other brokers, but ALL US NFA brokers will have to comply, just wait and see.

"Concern" yes sortof. Prevent? Not at all. I just explained that. SL and TP are pending orders, they are not market orders. They do not effect your position until they go into effect, ie: become a market order.

If you have 2 trades going and an SL does come along, it will be executed against the oldest trade first, which results in the exact same NET POSITION as if it had been executed against the newest. Ie: If you had 2 trades going long, you now have 1 trade going long with the new desired net long position.

If you would like to close both trades at the same time, or alter your lot size in a way that is not permitted by a single stop loss, you can use a buy or sell stop for the desired volume at the desired price. You can always trail a sell stop or buy stop order to keep a trailing stop. If you want a TP beyond the older lot's volume then again, use a buy or sell limit order for the desired lot size.

FIFO doesn't effect orders, just positions. The math gets a little more tricky since a growing lot size means doing a little jiggering with the numbers, but it's still the same net position.

Quote
You would be better off leaving your account in the U.S. and learning to use OCO entry orders as stops and limits on open positions.

An OCO order isn't going to change anything here, an OCO is just a pending order. It only goes to market when the net order is executed (ie: no longer OCO), and this rule effects positions not trades.

Quote
A simple notification on applications forms "Hedging may not be in the best interest of some investors. Use with proper understanding" would have been more than sufficient.

Yes, Absolutely. The NFA would've been better to approach this from a consumer education perspective instead of a commandment perspective. It does nothing to solve the net problem as we're all free to open offsetting positions in a 2nd account, it just makes it look like the NFA is "getting tough" with brokers without actually solving anything (but making things a little more difficult for everyone else). It's the illusion of regulation.
  • #118
  • Jul 4, 2009 9:18am Jul 4, 2009 9:18am
Quoting tradepro
The UK always does what the Americans do, so i dont think it will be long before the FSA also implements this changes.

There was a thread started 2 years ago about Governments not wanting retail forex to exist.
Rather don't think so. Number of reasons:
1. Rest of world has a lot of egg on its face from following US into the CDO mkts. like lemmings.
2. London fought like anything a while ago to avoid LSE from being taken over by NYSE for that very reason. The cumbersome US regulations and the tendency for US to constipate the mkts with more and more reg. visa vis Sarbanes Oxely, etc.
3. US not the undisputed big dog in near future. Has a bit of a tarnished image of late. Other world powers are emerging. US in for a long slog and uphill climb after the cdo and housing mkt binge. The policy decisions of a country struggling under staggering debt not so attractive.
JMHO...
  • #119
  • Edited 10:48am Jul 4, 2009 9:54am | Edited 10:48am
Agreed. UK took the lead in requiring segregated accounts..while US is adding rules that do not offer protection...just rules for the sake of rules...why don't they require a segregated accounts. Oh no, that would put some of the retail brokers that are crooks under as they would not be able to use your money to fund their operations....strange regulators we have. The best NFA that can do is that it mandates that cash forex firms disclose that customer’s funds are not “protected”. Great stuff. Why is a notice not enough on all this other crap that they want to do, that is really meaningless. Nothing changes, just that you won't have multiple positions, all trades for same pair would be lumped into one position and netted out. How does that offer any protection? The only thing it does is mess up the EAs that used long and short positions at same time (no hedging) or that use magic numbers (fifo and magic numbers, no can do or would need re-programming)
.
Quoting jiva34
Rather don't think so. Number of reasons:
1. Rest of world has a lot of egg on its face from following US into the CDO mkts. like lemmings.
2. London fought like anything a while ago to avoid LSE from being taken over by NYSE for that very reason. The cumbersome US regulations and the tendency for US to constipate the mkts with more and more reg. visa vis Sarbanes Oxely, etc.
3. US not the undisputed big dog in near future. Has a bit of a tarnished image of late. Other world powers are emerging. US in for a long slog and uphill climb after the cdo...
  • #120
  • Jul 4, 2009 10:56am Jul 4, 2009 10:56am
<<Agreed. UK took the lead in requiring segregated accounts..while US is adding rules that do not offer protection...just rules for the sake of rules...why don't they require a segregated accounts. Oh no, that would put some of the retail brokers that are crooks under as they would not be able to use your money to fund their operations....strange regulators we have. The best NFA that can do is that it mandates that cash forex firms disclose that customer’s funds are not “protected”.>>

could you educate me a bit on the segregated accounts thing?
what's the story there?
Thanks in advance.
This is a definition, but what are implications? You seem to be up on this?

"What is a segregated account?
A segregated account is an account used by brokerage firms to keep the customer's assets separate from the firms."
http://www.superiorinvestor.net/inve...d-account.html
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