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NFA - "No more Limit or Stop Loss orders"

  • #381
  • Aug 2, 2009 10:12am Aug 2, 2009 10:12am
from Alpari(US): Alpari (US) is in full compliance with the new NFA Rule 2-43 (b), which requires orders be executed on a First In, First Out (FIFO) basis when multiple positions are held in the same currency pair. This means that the position which was first opened will be the first to be closed. Stop-loss and limit orders will still be able to be placed on Alpari (US) accounts. (emphasis added)
  • #382
  • Aug 2, 2009 10:15am Aug 2, 2009 10:15am
from Trade View FX:
Dear Tradeview Clients:

As many of you are aware, this Friday July 31st, NFA Rule 2-43 becomes effective for all US based FDM’s and clients. Starting with Trade date Monday August 3rd, all positions will be closed on a First In, First Out (FIFO) basis. For those clients using IKON Platinum or IKON Viking platforms there will be no change to your normal trading activity. (emphasis added)
  • #383
  • Aug 2, 2009 10:18am Aug 2, 2009 10:18am
from GFT:
GFT: Get the Facts

http://www.gftforex.com/images/forex/hline.png
Due to the new rule enacted by the National Futures Association (NFA), some dealers will no longer be able to offer stop-loss and limit orders until they comply with the new FIFO matching rules.
Here are the facts:
Fact #1: The NFA recently imposed a rule (2-43 (b)) that is changing the way some dealers offer stop-loss and limit orders. GFT is already fully compliant with this rule and will not be affected — you will still be able to place stop and limit orders with us. Find out more >
Fact #2: Some dealers are asking their customers to transfer their account overseas as to avoid the new rule. GFT customers can keep their account stateside AND have full access to stop and limit orders through all DealBook platforms.
Find out more >


(emphasis in original)
  • #384
  • Aug 2, 2009 10:47am Aug 2, 2009 10:47am
CMS Forex: Fifo-Related Changes Made to VT Trader 2.0 Dear Valued Trader,

CMS Forex would like to inform you of upcoming changes to be made to the VT Trader 2.0 platform in accordance with NFA Compliance Rule 2-43(b). Beginning July 31st, positions will need to be offset on a first-in-first-out (FIFO) basis, meaning that the oldest one will be closed first.

You will notice the following changes in VT Trader 2.0:

  1. The "Close Position" command can only be issued against a position that is the oldest position in a group of positions with the same size in the same instrument.
  2. Three new order types will be introduced to allow for equivalent risk management methods before the implementation of NFA Compliance Rule 2-43(b). They are One-Cancels-the-Other (OCO), If/Then, and If/Then OCO orders. To learn more about these order types, please visit http://www.cmsfx.com/en/about-cms/company-news/fifo/

(emphasis added)

  • #385
  • Aug 2, 2009 10:56am Aug 2, 2009 10:56am
And, just to remind everyone -

From FXCM:
The National Futures Association (NFA), our industry's self regulatory organization in the United States, has informed all Forex Dealer Members, which includes FXCM, that it has adopted new Compliance Rule 2-43(b) regarding forex trading.
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. This will prevent stop-loss and limit orders from being placed on individual tickets (orders and positions) on FXCM LLC accounts. (emphasis added)

From what I have been able to determine, FXCM is the only stateside forex dealer who has decided to approach the issue in this manner.

If you are with FXCM, and your trading method uses stops or limits to enter positions and attached stop loss and limit orders, then you do have US based alternatives.

Forex.com, Alpari (US), GFT, CMSFX, Trade View Forex,
and IBFX all state that stops, limits, if...then oco's, and trailing stops are available to traders on their platforms.
  • #386
  • Aug 2, 2009 11:11am Aug 2, 2009 11:11am
God dam, that was the calm before the storm the last 3 days.. Ddaytrader, the evidence is overwhelming...if they would not be so stubborn...take a look at the pic below...all they have to do is do away with the separate open positions column and just use the summary column, they would be in complaince...the summary of positions is alrady there!!!
Attached Image
  • #387
  • Aug 2, 2009 11:59am Aug 2, 2009 11:59am
Quoting wwwin
that was the calm before the storm the last 3 days..
Well, I had not quite realized the extent to which FXCM's new trader restrictions will handcuff me to the screen.

When I enter a position, I enter on a stop.

I have attached to that order a stop loss and a profit limit.

At first I thought "Well, now I have to wait to see if the entry order is triggered, and then I will enter my stop loss and limit orders using OCO. Then I would be free to move about and let the market do what it is going to do." However, I now realize I have a big problem - I exit with two limit orders.

I will use an example to illustrate my dilemma: Suppose I enter a position, long 200k EU on a buy stop, and my stop loss is 40 pips, and I have an 80 pip take profit. Now, if this is overnight, and I am asleep, then that is the end of it, and I either win 80 or lose 40. However, when I am able to monitor and wait for an entry to trigger, I would, in this case, enter a second take profit limit order for 100k lot at the 40 pip profit level. If and when that limit order tiggered, under FXCM's former functionality, my inital stop loss and limit orders would be reduced from 200k to 100k.

Now, under the new trader restrictions, when my profit limit at 40 pips is triggered, I will need manually to adjust the size of the existing OCO, otherwise if my profit order is hit, I will find myself in an unwanted short position of 100k, and if instead my stop loss is hit, I will find myself still long 100k. And, if I am not mistaken, in order to adjust the size of an order, FXCM requires that the order be cancelled outright, and a new order entered.

I had a very simple routine that has now been needlessly complicated by FXCM's trader restrictions.

As I have said before, I was perfectly happy with FXCM, with no reason ever to complain about spreads, executions, spikes, etc. etc.

But this is really an unconscionable change for FXCM to impose upon its American customers.
  • #388
  • Aug 2, 2009 12:34pm Aug 2, 2009 12:34pm
Here is another one that got it right while FXCM persists in implementing trader restrictions.

From FX Solutions:

Placing Stops and Limits.

The NFA rule does not permit the attaching of stops and/or limits to an individual trade as is currently allowed. This functionality would contradict FIFO logic.

This does not mean, however, that you will be unable to effectively manage your risk once the NFA rule takes effect. To the contrary, you will still be able to limit your losses and maximize your profits as before by utilizing position stops and limits. These orders will be applied against your open trade(s) / position instead of one specific trade.


Close All Function

The existing GTS "Close All" functionality will still be available and will not be affected by the introduction of FIFO.


Close Trade Function

The ability to click on a specific trade and have it closed using the "Close" button will be limited once FIFO is in effect. In situations where there are multiple trades open, the "close" button will only allow you to close the oldest trade in each currency pair.

Emphasis Added - But note how all the solutions proposed by FXCM customers here in this thread have been implemented nearly word for word by FX Solutions. Now, FX Solutions also offers its cusotmers the choice of transferring to an off-shore division and maintaining all functionality as before. However, they have implemented workable solutions, addressing valid and reasonable customer concerns without forcing their customers to move off shore, whereas FXCM has chosen to flip us off and offer only a "my way or the highway" alternative.

Well, Im heading out to the highway.
  • #389
  • Aug 2, 2009 1:57pm Aug 2, 2009 1:57pm
In situations where there are multiple trades open, the "close" button will only allow you to close the oldest trade in each currency pair.



I just tested this on Oanda. I was able to close a newer trade by clicking on the trade and submit to close. It closed that trade and left my older trade in place. Both trades were the same size.
  • #390
  • Aug 3, 2009 1:03am Aug 3, 2009 1:03am
Quoting ddaytrader
Well, I had not quite realized the extent to which FXCM's new trader restrictions will handcuff me to the screen.

When I enter a position, I enter on a stop.

I have attached to that order a stop loss and a profit limit.

At first I thought "Well, now I have to wait to see if the entry order is triggered, and then I will enter my stop loss and limit orders using OCO. Then I would be free to move about and let the market do what it is going to do."...
and
breakout pullback orders do not show in order window....at least on a demo

sayonara
  • #391
  • Aug 3, 2009 4:50am Aug 3, 2009 4:50am
Quoting deuce
In situations where there are multiple trades open, the "close" button will only allow you to close the oldest trade in each currency pair.



I just tested this on Oanda. I was able to close a newer trade by clicking on the trade and submit to close. It closed that trade and left my older trade in place. Both trades were the same size.
I would check to see if when the daily equity run is printed if the newer position was indeed liquidated. I suspect that FIFO will be applied, and thus the closing trade will be applied to the oldest position when the final accounting is calculated.
  • #392
  • Aug 3, 2009 4:53am Aug 3, 2009 4:53am
Quoting sergej_2
and
breakout pullback orders do not show in order window....at least on a demo

sayonara
The platform, in a word, sucks.

I said I'd give it a month to see if FXCM will do the right thing, i.e. give back the functionality required and make it more intuitive, e.g. forex.com's "if ... then OCO."

I do not know that I have the patience to last a month with this piece of garbage.
  • #393
  • Aug 3, 2009 6:25am Aug 3, 2009 6:25am
Quoting ddaytrader
The platform, in a word, sucks.

I said I'd give it a month to see if FXCM will do the right thing, i.e. give back the functionality required and make it more intuitive, e.g. forex.com's "if ... then OCO."

I do not know that I have the patience to last a month with this piece of garbage.
I agree that changes should be made. However, the breakout pullback orders are NOT supposed to be shown in order window, as these are OCO orders and should show there only. We got some real problems, and they are not where the breakout/pullback orders show. I would like to see Jason give us some news, he has not posted for a while.
  • #394
  • Aug 3, 2009 6:41am Aug 3, 2009 6:41am
Quoting wwwin
I agree that changes should be made. However, the breakout pullback orders are NOT supposed to be shown in order window, as these are OCO orders and should show there only.
But this is FXCM convention, and is not typical. Both IB and Infinity will show all orders in an open order screen. I would prefer a consolidated view of all orders.

Quoting wwwin
We got some real problems ...
I am sure FXCM is not aware of any problems as this platform will lead to trader errors that will presumably redound nearly 100% to FXCM's benefit.

All I can say is that I usd to recommend FXCM with enthusiasm. I am now warning people off from them with the same energy with which I used to highly recommend them.

I do not know how FXCM could think that this situation would be in any way acceptable except to the most naive newbie.
  • #395
  • Edited 7:10am Aug 3, 2009 6:46am | Edited 7:10am
Quoting ddaytrader
But this is FXCM convention, and is not typical. Both IB and Infinity will show all orders in an open order screen. I would prefer a consolidated view of all orders.



I am sure FXCM is not aware of any problems as this platform will lead to trader errors that will presumably redound nearly 100% to FXCM's benefit.

All I can say is that I usd to recommend FXCM with enthusiasm. I am now warning people off from them with the same energy with which I used to highly recommend them.

I do not know how FXCM could think that this situation would...
Yes, where OCO show up is different than the IB and others, but this is the way they designed it. I thought this other poster was just saying that the software had an error, it does not, that is the way that they designed it.
In my opinion, the real issue is the no SL no TP no TS...nobody else is treating the way they do. Where OCO show up is just cosmetic, it has no subtance as far limitations or additional functionality. That is why I undocked the OCO window to its own window right below the positons window, to more easily relate them to the position that they are closing. Yes, visually is a pain but what can I say, if they put the OCO in regular order window and nothing else, we would still be complaining.
  • #396
  • Aug 3, 2009 7:35am Aug 3, 2009 7:35am
Quoting ddaytrader
I would check to see if when the daily equity run is printed if the newer position was indeed liquidated. I suspect that FIFO will be applied, and thus the closing trade will be applied to the oldest position when the final accounting is calculated.

I just checked the transaction history. The closing trade was linked
to the newer trade when it was closed. My oldest trade is still in place.
  • #397
  • Aug 3, 2009 7:44am Aug 3, 2009 7:44am
Quoting deuce
I just checked the transaction history. The closing trade was linked
to the newer trade when it was closed. My oldest trade is still in place.
Perhaps existing positions are being grandfathered in under the old rules?
  • #398
  • Aug 3, 2009 7:48am Aug 3, 2009 7:48am
Quoting ddaytrader
Perhaps existing positions are being grandfathered in under the old rules?
These were new trades that i opened yesterday afternoon.
  • #399
  • Aug 3, 2009 7:50am Aug 3, 2009 7:50am
Quoting deuce
These were new trades that i opened yesterday afternoon.
It looks as if they are doing what IBFX is doing, backend statement closing FIFO, client side, business as usual except on the month end statement, that would be FIFO order.
  • #400
  • Aug 3, 2009 7:50am Aug 3, 2009 7:50am
Quoting deuce
These were new trades that i opened yesterday afternoon.
That is interesting, isn't it?

I gues each dealer will roll out its implementation in its own way.

FXCM decided to do it with a wrecking ball.
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