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NFA - "No more Limit or Stop Loss orders"

  • #241
  • Edited Jul 11, 2009 1:02pm Jul 10, 2009 11:53pm | Edited Jul 11, 2009 1:02pm
Well it looks as if MT5 will do it this way and be FIFO compliant. Does anybody know when MT5 is coming out? The stakes are getting higher in the broker war, yeah, let them fight for business.
http://www.fx1618.com/mt4/mt5-a.html

http://metatrader5.blogspot.com/
"The order management system has completely changed in Metatrader 5. Now an order is a request to execute a trade operation, the result of which can be a trade. A position is the total state of trades on a certain financial security. Any financial security can have only one position. Unlimited orders are possible but with only one resulting position per pair. This means that there won't be possible to hedge orders anymore. According to Metaquotes, this change in the trading system was made to make MetaTrader 5 compatible with other markets, where such system is a standard. Now MetaTrader 5 allows working on the much wider range of markets, than MetaTrader 4. And that was a reason to rewrite the trading system totally.

So MT5 will take away the hedge ability by offsetting long and short trades into one position (NFA ruling compliance*). If this is case, it is very bad news to many traders who use hedging as part of their trading strategy. Moving accounts from US to UK or other countries which still allow hedging will be pointless once brokers start switching to the Metatrader 5 platform."

To me no "hedging" no big deal, but if it were to have no SL or TP then would have been a big deal. Besides, "hedging" as formerly done in metatrader is not what real hedging is. Had you hedged that way, the equity would remain the same while the hedging position was open. So no real advantage to hedging that way. You could just have closed the position instead of "hedging" and enter again at a better time (when you would have closed the "hedging" position) and obtain the same result. Real hedging involves buying or selling Options, or working with other currency pairs that move in tandem, to minimize risk, not taking the exact opposite position. Yeah, EAs need to be reworked or started from scratch, but that is only a temporary problem. One problem that I see is if you want to trade both manually and thru EAs in the same account the same pair, then the trades would interfere with each other and you would need one account for manual and one account for only EAs. But it is what it is, therefore I am looking forward to MT5. Bring it on like now. http://metatrader5.com/


Quoting wwwin
With TSII, they could allow SL and TP on all orders if they choose to combine all orders into one aggregate position on the client end, and deduct sells from it or add buys to it. In their end, they can keep orders separate for FIFO purposes and close as much of the orders as needed in FIFO order according to your triggered closing orders. When you close, they can close the earlier opened orders in FIFO order. I do like contingent OCO orders so they should implement that, as you have more choices. They could really do it all. Some brokers now do....
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  • #242
  • Jul 12, 2009 2:52pm Jul 12, 2009 2:52pm
I was just reading the new FIFO and Price adjustments rules again at the NFA web site: http://www.nfa.futures.org/news/news...ArticleID=2273


According to the below quoted part of the rule, one might be tempted to assume that FXCM is overreacting and is throwing the stop loss and limit order baby out with the FIFO bath water, so to speak:

"A customer may, however, direct the FDM to offset same-size transactions even if there are older transactions of a different size."

So come on, FXCM! All you folks have to do is allow for the same stop loss and limit functionality as before, and just program your system not to accept stop loss and limit orders on a new entry order if that entry order is for the same size and for the same pair as an already open position!

Furthermore, this means that a trader should also be able to continue to close positions from the open position window, and FXCM could just have the close order rejected if there is a concurrently open, yet older position of the same size, or else, let the order go through but close the older position.

The real solution is so simple, that I can only assume that FXCM perhaps anticipates it will benefit greatly to move their business in the direction they have chosen.

I have always been happy with FXCM. But I am not pleased with this development at all. And I have to say, my suspicions have been raised. Again, I have always been very pleased with FXCM. I would like to continue with FXCM.

I would prefer not to have to move to another dealer. But if another broker chooses to operate according to the above quoted rule, and allow for the continued use of stops and limits, I do not see where I have a choice. Especially as I feel that FXCM has not been entirely honest as to their motives for these changes.

I spoke with IBFX on Friday. They claim, at any rate, that stops and limits will be available as before, but traders will need to vary position size when scaling into a position.

If they can do it, I'm sure others will as well. I hope that FXCM decides to do so, and that the decision is made quickly, because I really prefer to not do anything and just keep my account with them and here in the US.

Let's go, FXCM, do the right thing here.

-ddaytrader
  • #243
  • Jul 12, 2009 4:12pm Jul 12, 2009 4:12pm
Quoting ddaytrader
I was just reading the new FIFO and Price adjustments rules again at the NFA web site:...
I suggest you stop hoping that x does y, and simply accept that US brokers do not want retail forex traders.

There seem to be a lot of guys here unable to accept this.

It is quite simple. US Forex brokers do not want your US retail traders accounts, so they are working to make retail trading impossible.

Ok, so not actually impossible but very difficult under ridiculously restrictive rules.

Guess what will happen the bloodedly-minded determined few that are left in a few months time? Yep, some more restrictions to make what trading opportunities left impossible to follow.

Just move your accounts offshore, guys.

  • #244
  • Jul 12, 2009 4:28pm Jul 12, 2009 4:28pm
They will do whatever they can to make sure they make more money than you and their competition. They are the biggest FCM for a reason and it has nothing to do with trading and everything to do with running an economically viable company. They have a lot of pull with the NFA and probably contribute to their ability to stay in business. Best believe they want to make it harder for you when more and more people are making money in the markets now. The best options I can see for U.S. residents to do is transfer to an overseas broker with segregated accounts and a possible banking license.
  • #245
  • Edited 6:34pm Jul 12, 2009 6:23pm | Edited 6:34pm
Once MT5 is impletended, FXCM will have to either change TSII to a similar order system with SL and TP on all orders or offer MT5 US, otherwise they will not be competitive. Money talks and what we post in FF walks. Help is on the way.

Quoting ddaytrader
I was just reading the new FIFO and Price adjustments rules again at the NFA web site: http://www.nfa.futures.org/news/news...ArticleID=2273


According to the below quoted part of the rule, one might be tempted to assume that FXCM is overreacting and is throwing the stop loss and limit order baby out with the FIFO bath water, so to speak:

"A customer may, however, direct the FDM to offset same-size transactions even if there are older transactions of a different size."

So come on, FXCM! All you folks...
  • #246
  • Jul 12, 2009 7:32pm Jul 12, 2009 7:32pm

These new rules are not good for my style of trading. I closed my account at IBFX and I opened an account with MIG, the Swiss broker. I do not understand the true intentions of the NFA, the traders are closing their accounts with U.S. brokers.

We have to make a lot of money to live quiet as the poor.
  • #247
  • Jul 12, 2009 7:37pm Jul 12, 2009 7:37pm
Quoting gambrinus

These new rules are not good for my style of trading. I closed my account at IBFX and I opened an account with MIG, the Swiss broker. I do not understand the true intentions of the NFA, the traders are closing their accounts with U.S. brokers.

Good for you. It is the only thing to do.

  • #248
  • Jul 12, 2009 7:48pm Jul 12, 2009 7:48pm
When you place an OCO order does it require additional margin?
  • #249
  • Jul 12, 2009 8:11pm Jul 12, 2009 8:11pm
Quoting trader07
When you place an OCO order does it require additional margin?
NO, you are doing it to close an open position.
  • #250
  • Jul 12, 2009 11:38pm Jul 12, 2009 11:38pm
Quoting wwwin
NO, you are doing it to close an open position.
Thank you for your help.
  • #251
  • Jul 13, 2009 12:58am Jul 13, 2009 12:58am
Quoting wwwin
NO, you are doing it to close an open position.
I have one more question, so what's the difference between OCO's and the old way of placing stop/limit orders?
  • #252
  • Edited 9:25am Jul 13, 2009 8:54am | Edited 9:25am
OCO is not tied to any particular order. So if you use an initial entry order away from the market price, put an OCO order as SL and TP, and walk away from the computer, there is a chance that the OCO order will be executed and that the entry order will not be executed, leaving you in the market without a stop loss order. You should only use OCO as SL and TP only when you already have a position opened. The old way, if the price never reached your initial entry price, the SL and TP would not have become pending orders, where OCO orders are pending orders the moment you submit them. If Contingent OCO are implemented, then there would be no difference in functionally.

Quoting trader07
I have one more question, so what's the difference between OCO's and the old way of placing stop/limit orders?
  • #253
  • Jul 13, 2009 9:36am Jul 13, 2009 9:36am
Quoting Rabid

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.

Crazy? Madness, they have ridiculous rules invented to harm the small accounts. Crazy is that traders have to emigrate to Europe to escape the stupid rules and open their accounts there. I think the NFA wants traders to pull their money from the country. This is an enigma to me.

We have to make a lot of money to live quiet as the poor.
  • #254
  • Jul 13, 2009 10:22am Jul 13, 2009 10:22am
Quoting sleep1Iopen
Best believe they want to make it harder for you when more and more people are making money in the markets now. The best options I can see for U.S. residents to do is transfer to an overseas broker with segregated accounts and a possible banking license.
Making it harder for our traders is the last thing we want to do, which is why we're giving the option to trade through FXCM UK with segregated accounts.

And the order functionality suggestions are being heard loud and clear
  • #255
  • Jul 13, 2009 6:10pm Jul 13, 2009 6:10pm
The reason that this rule is going through is because the old boys at the CME want in on the retail fx market. All of these rules make trading fx futures more competitive.

Right now, there isn't a lot of fx cross liquidity on futures exchanges. By making retail customers nationwide have capital requirements and trading procedures similar to the centralized exchanges, the incentive to trade through an independent broker-market maker, like FXCM, goes down. Who wants to keep the counter party risk without the leverage reward?

I used to think that the futures community was one of the last bastions of capitalism: being a self-regulating group upholding the sanctity of a contract. It's quite disturbing that some of them have turned to the coerciveness of government in order to compete.

You guys should check out this webcast: "Meet the Forex Pros: Dan Gramza, Markus Heitkoetter, Tim Morge, and John Netto" on MoneyShow.com. It's recorded from the 2009 NY Traders Expo. It was really gut wrenching to watch these guys casually talk about taking over an industry through regulation.
  • #256
  • Jul 13, 2009 6:30pm Jul 13, 2009 6:30pm
This is my last contribution here. I shall remove my notification, and so will be unaware of what happens subsequently.

You guys are talking yourselves round in circles. I will say this one last time.

US retail forex trading is dying. US traders need to look offshore for your trading accounts.

Good luck guys. Yet again, I am glad I am a UK citizen.

Just open those offshore accounts, ok?

  • #257
  • Jul 13, 2009 8:39pm Jul 13, 2009 8:39pm
Makes sense, many times seen very low liquity in forex futures. Like both the bid and ask in tandem (not the spread) moving up or down more than 15 pips w/o an actual sale/purchase taken place in between. Hard to close a position sometimes at the price you want to. But if the NFA continues further tightening many traders will move offshore. I don't think that time is here yet.

Quoting wadams
The reason that this rule is going through is because the old boys at the CME want in on the retail fx market. All of these rules make trading fx futures more competitive.

Right now, there isn't a lot of fx cross liquidity on futures exchanges. By making retail customers nationwide have capital requirements and trading procedures similar to the centralized exchanges, the incentive to trade through an independent broker-market maker, like FXCM, goes down. Who wants to keep the counter party risk without the leverage reward?

I...
  • #258
  • Jul 13, 2009 11:05pm Jul 13, 2009 11:05pm
Quoting wadams
The reason that this rule is going through is because the old boys at the CME want in on the retail fx market. All of these rules make trading fx futures more competitive.

Right now, there isn't a lot of fx cross liquidity on futures exchanges. By making retail customers nationwide have capital requirements and trading procedures similar to the centralized exchanges, the incentive to trade through an independent broker-market maker, like FXCM, goes down. Who wants to keep the counter party risk without the leverage reward?

I...
I know exactly the webinar that wadams speaks of. It was a panel discussion, and I viewed it at the MoneyShow site. The identified guys spent the whole time making all sorts of disparaging remarks about forex, and the forex markets. They also spent substantial time trumpeting how much better and cleaner their CME financial futures were/are.

As far as I'm concerned, Gramza, Heitkoetter, Morge, and Netto are full of manure. But they, and other CME toads probably DID pressure their little drinking buddies over at NFA to do what they've done: outlaw stop losses, outlaw profit taking orders and outlaw trailing stops.

It'll be a cold day in "you know where" before I ever engage in financial futures contracts. Just my own little way of fighting back.
  • #259
  • Jul 14, 2009 3:04am Jul 14, 2009 3:04am
Is the OCO order suitable for scalping (5-10pips) or is it harder than scalping with stop/limit orders?
  • #260
  • Jul 14, 2009 8:01pm Jul 14, 2009 8:01pm
Quoting fx-Junior
Is the OCO order suitable for scalping (5-10pips) or is it harder than scalping with stop/limit orders?
Should be same if you open the position manually
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