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NFA New Rule Not allowing stop and limit orders

Quoting price
It seems to me that this rule is being misunderstood or misread. I trade with Oanda. I asked them today about it and this is what they said......


Short Description: FIFO rule question

Dear M******,Thank you for your interest in FXTrade.OANDA's FXTrade platform
currently operates using a First-In, First-Out (FIFO) procedure. We do not
anticipate any change to your ability in how you trade with OANDA. At present,
OANDA will not be removing our Stop Loss or Limit order function from the platform.
Should this ever change, then we will certainly...
The reason why Oanda will not be effected by this is because all trades on the same pair are put into the same trade position. So if you make 5 buys on the same pair all it does is add to your position therfore FIFO does not count because there is only one position. MT4 does not work like that. If you make 5 trades on the same pair you will get 5 different positions therefore enacting the FIFO law so in order to get out the very first trade must be closed and so on.

This new rule is horrible and stupid. What sucks most is UK brokers are not permitted by law to allow US citizens to open an account with them. The only broker I have found which will help us is forex.comUK which I really don't want to go to.
Quoting strongtower
The reason why Oanda will not be effected by this is because all trades on the same pair are put into the same trade position. So if you make 5 buys on the same pair all it does is add to your position .....
No, actually, I can open multiple positions on the same pair, in the same direction, and the same trade size. It shows each trade separately and I can set different take profits on any position I choose.
Quoting Jason Rogers
Hi jmw,

No plans as of yet. The summary window will show your positions combined into one big position, but you would still need to add a separate OCO order acting as a stop/limit. I am taking all of your suggestions and feedback and making it known within FXCM.

Jason
Actually you wouldn't need a separate OCO order. If all the positions were combined into one position, then FIFO would work fine with a stop tied to that one position because the entire order would be taken out when the stop or take profit hit. This would still allow entry orders for some partial take profit (TP) while not forcing me to change the OCO. With what you guys have planned, if I take a partial profit on a position, then I have to go and change the OCO. It's more dangerous for me.

Anyway, please consider what I am saying as it may be easier on the programmers and us traders.

Thanks
Hi All,

I just wanted to throw this in here.. At IBFX the MetaTrader platform will continue to work as it does now.

Will have some FAQs and a video explaining everything shortly.. Marilyn

Interbank FX Announces Compliance with the New NFA FIFO Rule, Retaining All Platform Order Functionality Including Expert Advisors

-Interbank FX’s proprietary backoffice solution offsets positions adhering to FIFO rule-


SALT LAKE CITY— July 20, 2009—Interbank FX (IBFX.com), a worldwide provider of online foreign currency (Forex/FX) trading, announced today a solution for NFA Compliance Rule 2-43 affecting all NFA regulated Forex brokers.

Using our proprietary backoffice solutions, Interbank FX will allow our Meta Trader 4 platform to remain 100 percent compliant, while retaining order functionality and flexibility for customers trading. The MT4 platform will continue to function as our customers have experienced over the last several years. This includes the ability for customers to use fully functional Expert Advisors, Stops Losses, Take Profits, Trailing Stops and Limit Orders without making any needed adjustments.

“Certain US competitors have decided that their solution to the new FIFO rules are to move their customers overseas, rather than being compliant,” said Todd Crosland, Chairman and President of Interbank FX. “At Interbank FX, we have embraced the NFA’s efforts to help protect customers and provide a seamless solution without any changes to their current trading strategies.”

The only modification for customers will be their daily and monthly account statements, coming directly from the proprietary Interbank FX backoffice system using NFA FIFO offsetting procedures. The FIFO rule takes effect beginning July 31/August 1, 2009.

Interbank FX is currently working on a step-by-step video which will be available shortly on our web site, www.ibfx.com.

About Interbank FX

Headquartered in Salt Lake City, UT, Interbank FX, LLC (IBFX) is a provider of online Forex trading services, offering individual traders, money managers and institutional customers proprietary technology, tools and education to trade spot foreign currency online.

Unlike other off-exchange retail foreign currency brokers, IBFX has distinguished itself among industry leaders with its unique multi bank liquidity feed, proprietary tools and services, and remarkable focus on customer care. This has led to longer term relationships and to numerous awards and industry accolades, including Best Online FX Provider, Best Foreign Exchange Broker, Best Chairman, Ernst and Young Entrepreneur of the Year, and Inc 500.

IBFX serves more than 35,000 clients from more than 140 countries around the world and has supported a trading volume in excess of US$80 billion in a single month. The company is regulated as a member of the National Futures Association and is also registered with the Commodity Futures Trading Commission as a Futures Commission Merchant. Trading in the off-exchange retail foreign currency market is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose. With all major news releases, there is the possibility of significant price volatility. IBFX is not liable for any loss or damage, including without limitation any loss of profit, which may arise from the use of Dow Jones FX Select or reliance on such information.
Quoting Marilyn
Hi All,

I just wanted to throw this in here.. At IBFX the MetaTrader platform will continue to work as it does now....

Thank. God.

I hate FXCM's scare tactics.
Quoting Marilyn
Hi All,

I just wanted to throw this in here.. At IBFX the MetaTrader platform will continue to work as it does now.

Will have some FAQs and a video explaining everything shortly.. Marilyn
Firstly, happy birthday Marilyn. Back to the topic, not about fifo but hedging. I'm not hedging fan and never hedging but when I can't open a sell limit order without closing the previous buy order first, how can you say the platform continue to work as before? I just don't get it, why a pending order in opposite direction can be consider hedging when it's not yet active? I'm not hedging yet because it's still pending. That's how I see it.

Understand from your colleague via live support that this kind of trade can't be accepted by the system. I wish you can bring it up and do something. At least allow it if take profit for the previous long order is set to lower than the sell limit price, so it close first before the pending short order being execute. Still NO hedging. I want to short at that exact price, like this I can't anymore except being in front of the platform 24/7.

Thought?
I have read most of the posts in this thread but none of them ask the right question (except post #13) , WHO BENEFITS FROM THOSE RULES, certainly NOT the trader.

Now how about some BROKER RULES, e.g. a rule against "hunting down stops", a rule against increasing spreads indiscriminately, a rule against tardy redemption of PROFITS. Get the drift. If the NFA is supposed to be fair, how come they have NOT addressed those important matters which affect TRADERS.

All in all, it seems the NFA is there for the Brokers and TRADERS are the suckers!

Pipsqueak2
Quoting Snobol1
I have read most of the posts in this thread but none of them ask the right question (except post #13) , WHO BENEFITS FROM THOSE RULES, certainly NOT the trader.
“This measure was taken for customer protection and market transparency,” said Larry Dyekman, the futures association’s director of communications. “We feel that other methods of offsetting trades would mislead some customers into thinking their accounts were more profitable than they actually are. By using the first-in, first-out method, which is how it is done on the futures exchanges, customers will have a much clearer view on where their account stands at the end of the day.”

http://www.bloomberg.com/apps/news?p...d=agM.0z6yEfvI
Quoting Trader KGB
“This measure was taken for customer protection and market transparency,” said Larry Dyekman, the futures association’s director of communications. “We feel that other methods of offsetting trades would mislead some customers into thinking their accounts were more profitable than they actually are. By using the first-in, first-out method, which is how it is done on the futures exchanges, customers will have a much clearer view on where their account stands at the end of the day.”

http://www.bloomberg.com/apps/news?p...d=agM.0z6yEfvI...
That's what they WANT us to believe, I say BS. Because if the rules were to protect TRADERS why did they not rule against the practise of stop hunting and spread baiting? And why not rule against Brokers with sticky fingers who want to hang on to profits as long as possible? Furthermore if traders liked the rules on the Futures market, they would trade there instead, (unless there is a rule against that too).

All the rules so far are TRADER constricting rules, the Broker is NOT TOUCHED. I believe there are some BAD brokers out there. They are the ones who need legislation (rules). The problem (if there is one) is traders are at the mercy of Brokers who trade against their clients and have an attitude of never losing no matter what.

Surely there are good and bad brokers, so its up to the NFA to control the bad ones. That, to my knowledge, they have not done.

Pipsqueak2
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The reasons for introducing these regs are farcical. Please, we don't need your hand wringing nannying to 'protect' us from ourselves. I have never read such shit in all my days. Simplest answer is don't do business with a USA based forex broker.
Quoting Aesculus
The reasons for introducing these regs are farcical. Please, we don't need your hand wringing nannying to 'protect' us from ourselves. I have never read such shit in all my days. Simplest answer is don't do business with a USA based forex broker.
The whole campaign was badly planned by the NFA, images of the Charge of The Light Brigade come to mind - an indication of the kind of people at its head. The trader was never considered - it was thrown out without the slightest thought as to the implications to the brokers, their clients or the platform producers - no significant time was given to make the required changes smoothly, result was the extension of the deadline followed by their open letter "telling off" brokers about how their sales people were passing on false information about the requirements.

I am glad I'm not with a US broker, it seems that their next target is scalping, ah, but remember, this is all being done in your interest, they only want to protect you! Good 'ol NFA! Long live the Nanny State, Home of the not so free, Land of the persecuted trader!

You know how in the US you all say "wow, you know that in Europe the women all sunbathe topless, they have thousands of nudist beaches AND sex is not a taboo subject, they are all open minded and free spirited!" Well the latest version is "Wow, you know that in Europe you are allowed to hedge in Forex and the regulators are all open minded and free spirited, yea they even let you scalp!"

I am happily able to do both with ACM who are Swiss based, they are even introducing the MT4 this month if that is your platform of preference. You may also wish to look at other Euro-Brokers, but I would recomend mine for its excellent execution qualities. Like Aesculus says, vote with your feet if you are not happy.
Indeed its even more ridiculous when you read the NFA's official releases. They are concerned that traders with high (e.g. 200:1 leverage) may not realise how quickly this can liquidate them ! Now hang on there just one minute, every broker states clearly how forex is high risk and you can lose ALL your money and its usually written a foot high in bold type. Now, if that doesn't put someone on alert and they lose money through not understanding how leverage works then whose fault is that ? If they don't understand the basics then they shouldn't be trading in the first place, be it on your own head. So, if you can't stand the heat.......
The NFA is definitely NOT interested in traders, they are interested in BROKERS. The NFA is like a bully, " oh here we are, we can make all the STUPID rules we want and they have to FOLLOW THEM LIKE LEMMINGS".

I agree wholeheartedly with the other posts. The NFA is stupid and POWERFUL, if you trade in the US. Regulation is good IF it achieves some kind of benefit for ALL: Broker:Trader. When ALL the "rules" are pointed to the trader and the broker is left untouched, whom does it benefit?

If my broker gets regulated, I will close my account and move it to another broker which does not have those stupid "rules". Rules are necessary but one-sided rules are counter-productive and destructive to the trader. As US brokers' accounts are closed in large numbers, maybe they will get the point. This is a global market, and traders don't have to put up with this garbage.

Why does the NFA not protect EVERYBODY by taking away our computers? Maybe that will be next. Look at it; NO COMPUTER: NO LOSSES. But don't forget NO GAINS EITHER!!!

Pipsqueak2
  • Post #75
  • Quote
  • Last Post: Mar 11, 2011 10:44am Mar 11, 2011 10:44am
Quoting forexisfx
NFA will not be allowing stop and limit orders on open positions either, as this conflicts with their FIFO - first-in, first-out - new policy. This goes into effect may 17th.

Go NFA, Go NFA.

? ? ? ?

Any thoughts ?
Nazi Futures Association? There's my thought! lol
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