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NFA - "No more Limit or Stop Loss orders"

  • #261
  • Edited 6:47pm Jul 14, 2009 6:13pm | Edited 6:47pm
Well I have been generally happy with having one account with FXCM but now they are getting a little ridiculous. They send out an email "Introducing OCO Orders and Pullback / Breakout OCO Orders" but no new functionality than what they had previously stated. If they don't also add contingent OCO, this Pullback/Breakout semantic crap is worthless. Oh yeah, you can enter a "Pullback/Breakout OCO" with one less click, but NO SL or TP functionality for this Pullback/Breakout OCO wonder order. Nothing has changed from the first email. Semantics don't add additional functionality. How are you going to put a SL and TP on OCO breakout if the second required OCO for SL and TP is not contingent on the first order? It's an easy order to place, and even easier to get blown away. New order terminoligy and no subtance behind it.
  • #262
  • Jul 14, 2009 6:52pm Jul 14, 2009 6:52pm
Quoting wwwin
Well I always liked FXCM but now they are getting a little ridiculous. They send out an email introducing
"Introducing OCO Orders and Pullback / Breakout OCO Orders"
but no new functionality than what they had previously stated.
If they don't also add contingent OCO, this Pullback/Breakout semantic crap is worthless. Nothing has changed from the first email.
Semantics don't add additional functionality. How are you going to put a SL and TP on OCO breakout if the OCO is not contingent?

I agree, and if I have to go offshore to get the functionality I necessary, will likely look elsewhere. I know FXCM has made transfer to their UK subsidiary an option, but I feel that FXCM has really devised these changes to force their customers offshore. I do not wish to reward their duplicity. I'm a piker, so losing me alone will cause no lost sleep in the corner office, I'm sure. But I imagine if FXCM loses enough pikers to other dealers, then perhaps they will rethink their strategy.

I received their email also, hoping it was going to address the concerns that have been raised by many of their customers. Instead it was just a rehash of what we already have been told.

This is especially frustrating in that the new NFA regulation provides a workable exception that would allow FXCM to keep almost the entire status quo intact. Also, when I trade futures, I can choose my offset method (see attached screenshot).

FXCM is operating under the assumption that their customer's are incapable of figuring out what they are doing.

I have already opened a few demo accounts with other brokers to see which I may find compatible.

ddaytrader
Attached Image
  • #263
  • Jul 14, 2009 7:10pm Jul 14, 2009 7:10pm
IB order types below, and they are a FINRA member, and they offer all of the orders below and no problem.


Quoting ddaytrader
I agree, and if I have to go offshore to get the functionality I necessary, will likely look elsewhere. I know FXCM has made transfer to their UK subsidiary an option, but I feel that FXCM has really devised these changes to force their customers offshore. I do not wish to reward their duplicity. I'm a piker, so losing me alone will cause no lost sleep in the corner office, I'm sure. But I imagine if FXCM loses enough pikers to other dealers, then perhaps they will rethink their strategy.

I received their email also, hoping it was going to address...
Attached Image (click to enlarge)
Click to Enlarge Name: ib_orders.gif Size: 50 KB
  • #264
  • Jul 14, 2009 7:15pm Jul 14, 2009 7:15pm
Quoting wwwin
IB order types below, and they are a FINRA member, and they offer all of the orders below and no problem.
Yes, FXCM wants us to believe that all of those order types are "illegal" in the US.

Laughable.
  • #265
  • Jul 14, 2009 7:48pm Jul 14, 2009 7:48pm
I am beginning to wonder. Has anyone that transferred from US to UK notice any difference in the spread? There has to be some reason behind this. No business risks losing customers unless there is a reason behind it.


Quoting ddaytrader
Yes, FXCM wants us to believe that all of those order types are "illegal" in the US.

Laughable.
  • #266
  • Jul 14, 2009 8:02pm Jul 14, 2009 8:02pm
those transferring their account overseas, will you be insured or have better protection based on the countries laws ? does it apply to US citizens as well or it is simply based on the rules and regulations from invidual brokerages ? I know overall we are not insured here.
  • #267
  • Jul 14, 2009 8:48pm Jul 14, 2009 8:48pm
Quoting wwwin
I am beginning to wonder. Has anyone that transferred from US to UK notice any difference in the spread? There has to be some reason behind this. No business risks losing customers unless there is a reason behind it.
Win,
I had my ac transferred to UK last weekend. So far, I don't notice any difference in execution or spread.

Having said that, I too am not comfortable with this whole thing. I'm waiting to demo the platform with the NFA rules implemented this month end. Once I get a hang of how to manage trades with their new implementation, I would bring my ac back to US.
  • #268
  • Jul 15, 2009 7:19am Jul 15, 2009 7:19am
Quoting ddaytrader
I agree, and if I have to go offshore to get the functionality I necessary, will likely look elsewhere. I know FXCM has made transfer to their UK subsidiary an option, but I feel that FXCM has really devised these changes to force their customers offshore. I do not wish to reward their duplicity. I'm a piker, so losing me alone will cause no lost sleep in the corner office, I'm sure. But I imagine if FXCM loses enough pikers to other dealers, then perhaps they will rethink their strategy.

I received their email also, hoping it was going to address...
hi ddaytrader,

By not offering FXCM UK as an alternative, strategies requiring individual order management will not be available and nearly all MT4 expert advisors will have to be re-coded. We’re being very straightforward with how FIFO is affecting trading strategies and alternatives for traders needing to continue with their trading as is. There is no ulterior motive behind this as has been implied.

FXCM is making the same amount of money per transaction whether you trade through FXCM US or FXCM UK, so we would be happy for you to stay with FXCM US so that we don’t have to use resources on moving your account to FXCM UK. But for some traders, this is not a feasible option.

Quoting ddaytrader
…I feel that FXCM has really devised these changes to force their customers offshore.


No one is being forced to move and FXCM UK is a fully regulated entity by the FSA. Accounts are segregated in accordance with FSA regulation, which offers a higher level of account protection than through the US, and trade audit and customer complaint procedures are stricter with FXCM UK due to FSA regulations.

The major change at FXCM will be for MT4 accounts. MT4 will only be offered through FXCM UK due to expert advisors. We received information last week detailing how Metaquotes is changing the platform to be compliant with FIFO, and the changes will require the majority of EA’s to be re-coded.

Jason
  • #269
  • Edited 7:54am Jul 15, 2009 7:26am | Edited 7:54am
Yes, the EAs will most likely have to be recoded. But that is only a temporary hurdle. Once MT5 is implemented, most good EAs will be changed. Most EAs are being reworked everyday anyway on MT4 to fine tuned them. That is what I posted ealier, that MT5 will be fully compliant with FIFO and allow SL and TP on all orders. There is talk from MetaQuotes of a utility that will convert EAs to MQL5. Even if that is not forthcoming, I don't think this EA hurdle is a big deal. Just give it time, and all EAs will be re-worked or started from scratch.
But I don't think that will be the major change, the major change are the comtemplated order limitations on TSII as compared to other brokers and to the upcoming MT5. Once MT5 is implemented, FXCM UK accounts EAs will also have to be re-coded. There is talk that MQL4 will not be supported by Metaquotes when MQL5 is out. Therefore, like it or not, sooner or later MT5 will have to be implemented in UK.
Quoting Jason Rogers
hi ddaytrader,
....

The major change at FXCM will be for MT4 accounts. MT4 will only be offered through FXCM UK due to expert advisors. We received information last week detailing how Metaquotes is changing the platform to be compliant with FIFO, and the changes will require the majority of EA’s to be re-coded....

Jason
  • #270
  • Jul 15, 2009 7:28am Jul 15, 2009 7:28am
Quoting wapminnin
those transferring their account overseas, will you be insured or have better protection based on the countries laws ? does it apply to US citizens as well or it is simply based on the rules and regulations from invidual brokerages ? I know overall we are not insured here.
hi wapminnin,

Here are some details I can share on accounts segregated per FSA regulation:

Since Forex Capital Markets Ltd (FXCM UK) segregates client deposits and maintains funds in accounts earmarked for the benefit of customers, then in the unlikely event of bankruptcy, such funds may not be used to benefit other creditors, but to ensure customers receive back their deposits.

In the event FXCM is unable to pay all customer claims, retail clients may be able to file a claim with the FSCS to recover their funds. The actual level of compensation a client may receive from the FSCS will depend on the outcome of the FSCS's investigation and the basis of their claim. http://www.fscs.org.uk/consumer/key_...sation_limits/
  • #271
  • Jul 15, 2009 7:59am Jul 15, 2009 7:59am
Quoting ddaytrader
Yes, FXCM wants us to believe that all of those order types are "illegal" in the US.

Laughable.
Following NFA regulations is not optional for forex dealer members.
http://www.nfa.futures.org/news/PDF/...Adj_112408.pdf
  • #272
  • Edited 8:42am Jul 15, 2009 8:20am | Edited 8:42am
With all due respect, that talks about no hedging and FIFO, nowhere does it say that limits or stops cannot be used. All orders can be added or substracted from one aggregate position containing all executed orders in one pair and netted in that position. (MT5 style) Closing of position or reductions (SL or TP) to this one position can be done in FIFO sequence from the aggregated one position by the broker. (MT5 style). The rule does not prohibit Stops or Limits as long as done in FIFO order from the one aggregate positon. (MT5 style)

Quoting Jason Rogers
Following NFA regulations is not optional for forex dealer members.
http://www.nfa.futures.org/news/PDF/...Adj_112408.pdf
  • #273
  • Jul 15, 2009 8:52am Jul 15, 2009 8:52am
Quoting wwwin
With all due respect, that talks about no hedging and FIFO, nowhere does it say that limits or stops cannot be used. All orders can be added or substracted from one aggregate position containing all executed orders in one pair and netted in that position. (MT5 style) Closing of position or reductions (SL or TP) to this one position can be done in FIFO sequence from the aggregated one position by the broker. (MT5 style). The rule does not prohibit Stops or Limits as long as done in FIFO order from the one aggregate positon. (MT5 style)
hi wwwin,

I greatly appreciate your posts, and that is correct. The NFA is not prohibiting stops and limits, and neither is FXCM. OCO stop/limit entry orders can be used and it will net out open positions based on FIFO.

To clarify the previous post, the picture ddaytrader listed which includes LIFO is not an option that can be added on the platform since it would not be compliant with the nfa rule.

Jason
  • #274
  • Edited 8:55am Jul 15, 2009 8:53am | Edited 8:55am
Quoting Jason Rogers
Following NFA regulations is not optional for forex dealer members.
http://www.nfa.futures.org/news/PDF/...Adj_112408.pdf

I quote from page 3 of the above referenced doucment:



(b) Offsetting Transactions
Forex Dealer Members may not carry offsetting positions in a customer
account but must offset them on a first-in, first-out basis. At the
customer’s request, an FDM may offset same-size transactions even if
there are older transactions of a different size but must offset the

transaction against the oldest transaction of that size. (underline added)

And again from pages 8-9:

NFA believes that the potential for misuse outweighs any perceived
benefits from allowing customers to carry long and short positions in the same currency in the same account. Therefore, Compliance Rule 2-43(b) bans the practice and requires FDMs to offset positions on a first-in, first-out basis (FIFO). It does, however,allow customers to direct the FDM to offset same-size transactions. (underline added)



In other words, the NFA has made allowances for the use of automatic stop loss and limit orders, FXCM has chosen not to provide for those allowances.


Following regulations is not optional, but you that is really not the issue, is it? The regulations clear allow for the continued use by retail customers of the automatic stop loss and limit order, but FXCM has chosen to not make it available.


If I am not correct in the way in which I have interpreted the rules, then either Jason or someone else from FXCM ought to explain the error.


Thank You,


ddaytrader
  • #275
  • Jul 15, 2009 8:58am Jul 15, 2009 8:58am
Thanks, I appreciate that. The reason I replied to your post was because ddaytrader was not referring to LIFO (his pic) but my post (pic of trades allowed by IB). He had replied to my post, not his previous post. It appears he posted a pic of choices his broker gave him, it just so happened that LIFO was the one checked not FIFO. I think his point was that if FIFO was checked then the order will be in compliance. In other words, if you agree with the broker to only use FIFO, then compliance is met. The broker can close in FIFO order as long as all orders are aggregated into one position.

Quoting Jason Rogers
hi wwwin,

I greatly appreciate your posts, and that is correct. The NFA is not prohibiting stops and limits, and neither is FXCM. OCO stop/limit entry orders can be used and it will net out open positions based on FIFO.

To clarify the previous post, the picture ddaytrader listed which includes LIFO is not an option that can be added on the platform since it would not be compliant with the nfa rule.

Jason
  • #276
  • Jul 15, 2009 9:18am Jul 15, 2009 9:18am
Quoting wwwin
It appears he posted a pic of choices his broker gave him, it just so happened that LIFO was the one checked not FIFO. I think his point was that if FIFO was checked then the order will be in compliance. In other words, if you agree with the broker to only use FIFO, then compliance is met. The broker can close in FIFO order as long as all orders are aggregated into one position.

That is correct. I understand that according to new NFA regs, choice exists for you as a futures trader, but not as a spot forex trader. That is unfair of the NFA.

The primary point that threatens to get lost here is that the NFA still allows LIFO for forex to same-size transactions. Thus, any FDM could provide for auto stops and limits so long as multiple positions in the same currency were dissimilar in size.

Here is another interesting passage from the NFA document, this can be found on page 5 regarding the FDM's reasons for adjusting the price a customer received after the fact:

Most of the adjustments were due to factors such as stale quotes
generated by the FDM’s own matching system, unfilled orders due to technical errors with the FDM’s trading platform or the customer’s front end system, erroneous prices being entered by the FDM’s traders, and system connection issues arising from the FDM’s use of two or more different trading platforms. For example, two of the largest FDMs reported a significant number of price changes that related to the firms’ inability to integrate third party trading platforms. Accordingly, while some FDMs claim that they need the ability to make price adjustments so they can correct pricing errors beyond
their control, the actual data submitted by the FDMs and collected during NFA’s on-site examinations show that price adjustments are 2 ½ times more likely to result from problems associated with systems under an FDM’s control. (underline added).

It would seem that perhaps the elimination of automatic stop and limit orders is to protect the FDM from its own technological ineptitude.

Am I getting close?
  • #277
  • Jul 15, 2009 9:42am Jul 15, 2009 9:42am
Quoting ddaytrader
That is correct....
Sounds more and more like NFA member Dealers may have had something to do with new Forex regs? They do pay the NFA salaries after all. The more this thread plods on,the more confused I become. One fact is clear though, if u stay with an NFA Dealer memeber , you will have to deal with its(Broker) attempt to comply with new regs. That alone has ended my Forex experience in USA. And I firmly believe that accounts in UK WILL soon suffer similar regulations as US accounts. (hopefully there they will have a more open debate on those regs-unlike in USA )
FF = Forex Faggots
  • #278
  • Jul 15, 2009 9:51am Jul 15, 2009 9:51am
Quoting wwwin
Thanks, I appreciate that. The reason I replied to your post was because ddaytrader was not referring to LIFO (his pic) but my post (pic of trades allowed by IB). He had replied to my post, not his previous post. It appears he posted a pic of choices his broker gave him, it just so happened that LIFO was the one checked not FIFO. I think his point was that if FIFO was checked then the order will be in compliance. In other words, if you agree with the broker to only use FIFO, then compliance is met. The broker can close in FIFO order as long as all...
Yes, that was an error in my post. Meant to quote the LIFO pic but quoted the wrong post.
  • #279
  • Jul 15, 2009 11:58am Jul 15, 2009 11:58am
My biggest worry is this.......

I place stop and sell entry orders.

So....if I place a buy entry order at 1.5100 and I want my tp level to be 50 pips and my sl level to be 50 pips then I have to do the following?

buy entry order at 1.5100

sell entry order at 1.5150 (take profit)

sell entry order at 1.5050 (stop loss)



What if my orig entry order never gets touched...do I then end up getting in 1 of those sell entry orders or will they only be active if my buy entry order gets activated?
  • #280
  • Jul 15, 2009 12:06pm Jul 15, 2009 12:06pm
Quoting 60minman
My biggest worry is this.......

I place stop and sell entry orders.

So....if I place a buy entry order at 1.5100 and I want my tp level to be 50 pips and my sl level to be 50 pips then I have to do the following?

buy entry order at 1.5100

sell entry order at 1.5150 (take profit)

sell entry order at 1.5050 (stop loss)



What if my orig entry order never gets touched...do I then end up getting in 1 of those sell entry orders or will they only be active if my buy entry order gets activated?
According to the FXCM, that's your problem.

I still like FXCM. I really do want to keep my acount with FXCM. I just do not like the options that they are presenting to me.
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