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FXCM Removes Stop Loss and Limit Order according to NFA Rules

Discussion in 'General Forex Talk' started by Pratomo, Jul 3, 2009.

  1. Pratomo

    Pratomo Recruit

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    Dear friends,

    I'm trading with FXCM. And a couple of days ago i received an email from FXCM Like This :

    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. Watch This Video Presentation To See How To Manage Your Risk Using OCO Entry Orders

    For additional information, please visit the “NFA FIFO (First in, First Out) Rules” forum on DailyFX. We will be holding live question and answer sessions within the DailyFX forum. Visit Now

    The NFA, our industry’s self regulatory organization in the United States, has adopted Compliance Rule 2-43(b). 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. Stop-loss and limit orders do not comply with FIFO.

    The NFA’s stance is that FIFO provides more transparency to customers by offering a more accurate picture of the P/L than viewing the results of individual positions. This brings the forex market more in line with the practices of the futures and equities markets.

    While FXCM acknowledges the NFA’s concern and obligation to protect clients, FXCM would like to extend an option to those who would like to continue using stop-loss and limit orders, and who understand the underlying implications. Traders can transfer their accounts to Forex Capital Markets Limited (FXCM UK) and continue to place stop-loss and limit orders and maintain the ability to modify and close orders from the “Open Positions” window.

    If you wish to maintain your current platform functionality, you can trade through FXCM UK, which is regulated by the Financial Services Authority in the UK. Learn More

    If you wish to transfer your trading account to FXCM UK, please complete the one page form. Account Transfer Form

    DEADLINE TO COMPLETE TRANSFER FORM: JULY 8, 2009

    Important Notice: If you completed the transfer form, your account will be operational prior to the implementation of the new NFA regulations. You will be notified via e-mail when your account is transferred.

    Your account number and password will remain the same and your open positions will remain intact. Moving an account to FXCM UK involves some changes in deposit and withdrawal instructions, and changes in charges for transferring funds. However, FXCM UK clients have the option to send funds to a bank in the United States and fund via credit card. MYFXCM.com will also be available.

    Deposits | Withdrawals | MYFXCM.com

    Best regards,

    FXCM Micro
    Financial Square
    32 Old Slip, 10th Floor
    New York, NY 10005
    Forex Trading Micro Lots | FXCM Micro



    I Just need some clarification on this, specially for you that also had an account at FXCM

    Thanx and Regards,
     
  2. Nancy Cheah

    Nancy Cheah Sergeant

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    Since everything seemed to work against people like us, why don't everyone boycott American brokers and opt for European ones?

    I'm sure European broker don't practice this, right?
     
    #2 Nancy Cheah, Jul 5, 2009
    Last edited: Sep 5, 2011
  3. Stony

    Stony Sergeant

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    At present, there are no such silly rules in Europe. Let´s hope this will continue forever, but you never know what brain limited politicians might come up with... :(

    Regards, Stony
     
  4. Pharaoh

    Pharaoh Colonel

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  5. ernest8fingers

    ernest8fingers Master Sergeant

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    just did

    Out with American-in with anything not American(Forex at 1st-other markets to follow?) I trade with a Cypress based broker and u KNOW they can be trusted! NOT! I am moving to the Secchelles where at least i KNOW I am being screwed when I open a Forex account. Well- we lived to see the end of Forex in US. I wonder what new and interesting things will happen next year? Cant wait!
     
  6. Hitch-hiker

    Hitch-hiker Recruit

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    I am not defending NFA be no means , but it looks like FXCM is trying to make their customers switch to FXCM UK in every way they can ,possibly to escape the NFA raidar all together, and they have been doing so for a while now and that might be the reason behined the drop in the value of their balance sheet.
     
  7. Nancy Cheah

    Nancy Cheah Sergeant

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    I don't mean to be rude but I've heard that FXCM's going bankrupt.

    Is that true?

    And also, I've heard that it also shifted all it's main operations from the US to Australia lately.

    Is that also true?
     
    #7 Nancy Cheah, Jul 6, 2009
    Last edited: Sep 5, 2011
  8. Pharaoh

    Pharaoh Colonel

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    I doubt they're going bankrupt, but wouldn't be surprised if they don't start shifting more of their operations (and jobs!!!) to other countries because of the latest set if insane rules from the NFA.
     
  9. Nancy Cheah

    Nancy Cheah Sergeant

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    I believe that the NFA is such a loser when it imposes this particular ruling because all will perish sooner or later.

    Don't you agree?
     
    #9 Nancy Cheah, Jul 6, 2009
    Last edited: Sep 5, 2011
  10. Jason Rogers

    Jason Rogers FXCM Representative

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    Hi Pratomo,

    To clarify, stops and limits will still be available as OCO stops and limit entry orders for you to manage risk. Stops and Limits are being disabled on individual tickets since allowing traders to close the oldest position would not be FIFO compliant.

    The email sent out did not do a good job explaining this and we made a new press release to clarify this. http://www.forexpeacearmy.com/forex...ers-how-use-stops-limits-after-july-31-a.html

    Jason
     

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