What is the proper terminology for these types of Brokers? | Forex Factory

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What is the proper terminology for these types of Brokers?

  • #1
  • First Post: Oct 6, 2015 7:24am Oct 6, 2015 7:24am

  1. Brokers that group your positions into net positions
  2. Brokers that don't (i.e. they let you have individual trades like 2 long EURUSD and 2 short EURUSD would show up as 4 Trades, not 1 net position)

  • #2
  • Oct 6, 2015 5:28pm Oct 6, 2015 5:28pm
Quoting ycomp
Brokers that group your positions into net positions Brokers that don't (i.e. they let you have individual trades like 2 long EURUSD and 2 short EURUSD would show up as 4 Trades, not 1 net position)
MT4 brokers are a culprit of this.
Unfortunately in retail land its seen as the norm where as in the professional world positions are netted.
Look for a broker who offers better choices than MT4.
  • #3
  • Oct 6, 2015 6:29pm Oct 6, 2015 6:29pm
Quoting ycomp
Brokers that group your positions into net positions Brokers that don't (i.e. they let you have individual trades like 2 long EURUSD and 2 short EURUSD would show up as 4 Trades, not 1 net position)
Hi Ycomp,

Your question is about hedging. If your log and short positions net out, then your account does not allow hedging. If your log and short positions do not net out, then your account has hedging enabled.

It's worth noting that this is not a broker type. For example, FXCM offers both types of accounts, those with hedging enabled and those with hedging disabled. All FXCM US accounts have hedging disabled, since hedging is prohibited by US regulators. All non-US accounts with FXCM have hedging enabled by default, but FXCM clients have the option of disabling hedging on their accounts.
  • #4
  • Oct 6, 2015 6:32pm Oct 6, 2015 6:32pm
Quoting Jason Rogers
{quote} Hi Ycomp, Your question is about hedging. If your log and short positions net out, then your account does not allow hedging. If your log and short positions do not net out, then your account has hedging enabled. It's worth noting that this is not a broker type. For example, FXCM offers both types of accounts, those with hedging enabled and those with hedging disabled. All FXCM US accounts have hedging disabled, since hedging is prohibited by US regulators. All non-US accounts with FXCM have hedging enabled by default, but FXCM clients have...
no, that's not what i mean... hedging can have multiple trades of the same symbol open - it's just hedging when some are in opposing directions.

What I was referring to was net positions, without any individual trades. Aggregating all trades into 1 position - and no longer being able to see or manipulate the individual constituent trades. I guess it's just called "Net Position Trading" ?

yes, my question was about account types - not broker types, I mixed that up.
  • #5
  • Last Post: Oct 7, 2015 5:16pm Oct 7, 2015 5:16pm
Quoting ycomp
{quote} no, that's not what i mean... hedging can have multiple trades of the same symbol open - it's just hedging when some are in opposing directions. What I was referring to was net positions, without any individual trades. Aggregating all trades into 1 position - and no longer being able to see or manipulate the individual constituent trades. I guess it's just called "Net Position Trading" ? yes, my question was about account types - not broker types, I mixed that up.
Thanks for clarifying!

The net positioning you have described is mandatory in the US to comply with CFTC regulations requiring FIFO (first-in, first-out) execution. However, I notice your forum profile mentions that you live in Canada. That means you can have an account that is not subject to FIFO rules.

Friedberg Direct is regulated in Canada by IIROC, so you can set up a non-FIFO account through them. As an added benefit, your account would be insured for up to $1 million by the Canadian Investor Protection Fund (CIPF).

FXCM provides the technology for Friedberg accounts. Here's a link to a free demo: http://bit.ly/1Lzt6B0
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