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Thread: FIFO Rule

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    Cool FIFO Rule

    Hi, Fello Trader,
    I reaceived e-mail from IBFX about FIFO rule. I don't know only IBFX or other brokers also. Before, Traders can't do headge, now FIFO... Trying to make trader harder.
    Good luck with future trade.

    To our valued clients,

    As you may know, the National Futures Association (NFA), has implemented new First-in, First-out (FIFO) requirements that will be in effect as of July 31, 2009. We at Interbank FX have been working hard on a solution and are confident that our traders will be able to use our MetaTrader 4 platform with little or no interruption. They will also continue to be able to use their MT4 expert advisors.

    The NFA is striving to ensure the highest levels of integrity from all market participants and their intermediaries. We want to assure you that Interbank FX strives to be 100% compliant with the NFA.

    We are currently working on some informational and instructional videos regarding the FIFO requirements and our solution, however most of you will be able to continue trading without any impact to your platform or strategies. In our effort to provide the best solution for your trading, you will be fully advised prior to any proposed changes.

    We thank you for your continued support and wish you the best of luck with your trading.

    Best regards,

    IBFX

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    Re: FIFO Rule

    Quote Originally Posted by cowboy
    Hi, Fello Trader,
    I reaceived e-mail from IBFX about FIFO rule. I don't know only IBFX or other brokers also. Before, Traders can't do headge, now FIFO... Trying to make trader harder.
    Good luck with future trade.

    To our valued clients,

    As you may know, the National Futures Association (NFA), has implemented new First-in, First-out (FIFO) requirements that will be in effect as of July 31, 2009. We at Interbank FX have been working hard on a solution and are confident that our traders will be able to use our MetaTrader 4 platform with little or no interruption. They will also continue to be able to use their MT4 expert advisors.

    The NFA is striving to ensure the highest levels of integrity from all market participants and their intermediaries. We want to assure you that Interbank FX strives to be 100% compliant with the NFA.

    We are currently working on some informational and instructional videos regarding the FIFO requirements and our solution, however most of you will be able to continue trading without any impact to your platform or strategies. In our effort to provide the best solution for your trading, you will be fully advised prior to any proposed changes.

    We thank you for your continued support and wish you the best of luck with your trading.

    Best regards,

    IBFX
    Hi cowboy,

    It applies to all NFA registered US brokers. IBFX implemented part of the ruling -- the hedge ban in mid May. Quite a few other brokers didn't follow , for instance, FXDD... But now the deadline line is dead set on 31/07, so FXDD will have to disable hedging.

    I am very interested in what would be IBFX's solution on FIFO so we as traders still have full control about our open positions.

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    Re: FIFO Rule

    Guys on forexfactory forum are discussing this issue.

    Their interim workaround to this rule is
    1) open positions with different lots (0.1 then 0.11 or 0.09 then 0.1), or
    2) if you opened two positions 0.1 and 0.1, then close 0.01 from first one and you'll be able to work with your second position.

    Anyway, it's only for NFA regulated brokers.

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    Re: FIFO Rule

    I'm sure that other brokers will start it sooner or later... also.

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    Re: FIFO Rule

    Quote Originally Posted by Starting
    Guys on forexfactory forum are discussing this issue.

    Their interim workaround to this rule is
    1) open positions with different lots (0.1 then 0.11 or 0.09 then 0.1), or
    2) if you opened two positions 0.1 and 0.1, then close 0.01 from first one and you'll be able to work with your second position.

    Anyway, it's only for NFA regulated brokers.

    Quite a clumsy workaround, but I guess it is probably the only way out.

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    Re: FIFO Rule

    This FIFO is serious problem.

    All NFA regulated brokers, such as FXCM US, won't allow Stop Loss and Take Profit.

    I heard that fxcm is currently suggesting it's clients to move to FXCM UK which is not NFA regulated and still have the SL & TP ability.

    I'm worried about Oanda, so I contacted them, and they said it's not a problem. This makes me thing that Oanda might be collecting orders before hand, but well, they are famous for being trustworthy though, so I can't really complaint.

    Here's the reply from Oanda.

    regards,

    Ticket Number: HD2192237
    Short Description: NFA Fifo rule?

    Hello,

    Thank you for your interest in FXTrade.


    We don't anticipate any change to your ability in how you trade with OANDA on FXTrade. Should this ever change, then we will certainly inform you in a timely manner.

    Please do not hesitate to contact us if you require further information.

    Kind Regards,

    OANDA FXTrade Team
    [url]http://fxtrade.oanda.com/[/url]

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    Re: FIFO Rule

    Quote Originally Posted by William
    This FIFO is serious problem.
    All NFA regulated brokers, such as FXCM US, won't allow Stop Loss and Take Profit.
    William, could you explain more detail about statement above: Stop Loss and Take Profit is not allowed. Is that mean we can not put Stop Loss?

    Thanks

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    Re: FIFO Rule

    This email i get from FXCM.....

    Dear Client:

    A major new National Futures Association (NFA) rule goes into effect on August 1, 2009. This rule affects all U.S. regulated Forex Dealer Members. Forex traders will no longer have the ability to place stop-loss or limit orders. Nor will traders be able to modify or close trades from the “Open Positions” window. As these features will be removed, all stop-loss and limit orders held on FXCM LLC accounts at the close of trading on July 31, 2009, will be deleted.

    FXCM has always encouraged active risk management through the use of stop-loss and limit orders. Stops and limits are two entry orders that are linked to an individual open position. If a stop or limit order is triggered then the other is canceled. FXCM has introduced a new feature called OCO (One Cancels the Other) entry orders, which will provide traders with the same functionality as stop and limit orders except they are not linked to any position.

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    Re: FIFO Rule

    William, could you explain more detail about statement above: Stop Loss and Take Profit is not allowed. Is that mean we can not put Stop Loss?

    Thanks
    If you pay attention to your broker the ticket numbers, SL & TP are considered new order that will then be merged to un-hedge the open order. It seems that is the common condition on most brokers. Thus SL & TP are new order, while the FIFO require us to close the open order not making new orders. Thus, SL & TP are not allowed.

    The FXCM OCO is a good replacement though, coz NFA doesn't allow any hedge, thus any new order that is counter the old order will make the old order become liquidated. Although I think there is still hole in these rules.

    Well, like those in other forum said, NFA is sure consist of a bunch of ****** people who don't understand trading at all.

    Regards,

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    Re: FIFO Rule

    I have contacted IBFx and they explained that FXCM statement was not quite right about FIFO mentioned by NFA.
    In IBFX, we still can use SL and TP for a position with different lot size. If you add another position with the same lot size as the previous, you can not close the position. To close the second position you have to closed the first one.
    For example:

    00:00 BUY STOP 1 mini at 1.4000 with SL: 1.3960 and TP: 1.4100; We can set SL and TP for the first order
    00:05 BUY STOP hit at 1.4000; So you have now open position with SL: 1.3960 and TP: 1.4100
    00:10 BUY STOP 1 mini at 1.4050; At this moment you can not place SL and TP because you still have open position with the same lot size (1 mini)
    00:15 BUY STOP 1.1 mini at 1.4050 with SL: 1.4010 and TP 4100; At this moment you can place SL and TP because different lot size from the open position.

    So my conclusion is: as long as we keep multiple order with different lotsize, we still can set SL and TP and manage them individually.
    Or if we only trade 1 lot in a time, there would be no problem with the FIFO rule.

    Yet I don't know why FXCM make statement like that.

    Hope this can help to explain about FIFO rule.

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