Does the NFA plan to destroy MT4 in the USA?

[g2008p]

I didn't ask for this 'help'

All I can say is what was a successful strategy has now been disabled because of this 'help'. I have always assumed all responsibility for my failure or success, and now been forced to move my investment capital offshore. What a waste- the largest economy in the world will be losing participants in the largest market in the world, forex...all while making NFA brokers uncompetitive with more over-reaching regulations. I also had the full knowledge that my broker was and is an NFA market maker, and was still happy with the results up to this point. I didn't ask for this 'help'. Sorry to say how it is necessary to now pursue a freedom and passion outside the USA....

 

[PipStar]

I no longer have accounts with NFA regulated brokers. Many useless rules but small protection for the trader.

 

[Damir]

ATC

Judging by what I've heard from ATC Brokers, they have already resolved this problem as their MT4 server implementation automatically aggregates all your orders into a single net position even allowing you to have several buy and sell orders on a same instrument at the same time. It completely supports NFA FIFO rules and at the same time virtualizes your separate orders.

I am now waiting for their response regarding this new post of yours so we'll see.

Best,

Damir

 

[Pharaoh]

Hmmmm.... aggregation and virtualization - that's a GREAT work around if they can get it programmed correctly.

 

[Damir]

We'll see. Very soon.

 

[Zoner]

Yes

AM I MISSING SOMETHING HERE????

Yes you are. You are assuming all positions are equal and always in the same direction. Bottom line, it should be up to my discretion as I am the one responsible for my money or the money of my clients. FIFO serves no purpose. If I am wrong, please tell me how the FIFO rule will help anyone.

 

[AsstModerator]

An FPA member emailed in something from IBFX about this...

Thank you for contacting us regarding first in first out or FIFO. Yes this will affect your account and all accounts traded with us as it is an NFA regulation.

The explanation is this. If you have an order placed yesterday for 1 lot of GBP/USD, and you place an order of 1 lot of the GBP/USD today. You must close the lot yesterday as it was the first one in the market before you can close the second order.

But the good news is this only affects trades that are identical. So for example in the same scenario if you closed 0.01 of the first order they would no longer be identical as you would have a .99 order and a 1 lot order meaning you could close either position at any time. This means on non identical orders you will be able to use whatever stop losses you choose.

OR as a viable option you can simply stack your orders in increasing levels of 0.01 so 1 lot then 1.01 lots and so on. These would also be no identical orders.

This new rule is expected to go into effect on July 31st of 2009.07.01

 

[Pharaoh]

It's nice to see that brokers are working on solutions for this, but I don't know if the NFA is going to buy IBFX's idea. I suspect the NFA will say FIFO applies without regard to individual position size.

 

[metatrader247]

Hi Pharoh,

You wrote: There was a little detail about FIFO (first in, first out). I assumed this was only talking about hedges. Evidently, the NFA FIFO rule has some more implications. FPA member Pratomo posted some info from FXCM about the problems in the forums 2 days ago and I've done a little more digging.


I made the same assumption, that it was only talking about the inability to create an offsetting position in order to hedge.

I thought it was strange that FXCM was the only major NFA regulated broker making the claims that OCO and FIFO were going to be required for all orders, not just offsetting (hedging) transactions, declaring that MT4 and EA trading would no longer be possible in the US.

Are we sure they intepreted the new rules properly? At first I thought it was just a marketing gimmick to get people to switch to FXCM (UK) from other brokerage firms (like IBFX), and I still wonder.... has the NFA issued ANY clarifications or statements regarding the new rule to help us interpret it? Or are we going entirely on the word of FXCM to understand the ramifications of the new rule?

--
Scott Wang

 

[Pharaoh]

FXCM seems to be the most panicked, but IBFX and ATC seem to be aware of it and trying their own countermeasures against it. That's enough to make me think it's not just some FXCM plot to move accounts.