[eurekafx]

I wanted to try a [GBPUSD] daily breakout strategy that tells you to place a pending buy stop 50 pips above the NY session's Close price. That order would have a stop loss of 27 pips. This strategy also tells you to place a pending [same currency pair] sell stop 50 pips below the NY session's Close price. That order would also have a stop loss of 27 pips. If one pending order's price gets hit, it will either proceed into profit-land or get stopped out before the other pending order would get activated.

When I tried to enter these into my MBTrading demo [MT4] account, it placed my buy stop order but refused my sell stop order. (The screen said "Too many orders", which was ridiculous because I had no other orders, live or pending.) I called MBTrading Tech Support, and the Rep said my 2nd order was rejected due to the new NFA Compliance Rule that bans hedging. I told him I thought that was "overkill" because there's no way my 2 orders can be live at the same time. I told him I was going to try entering these same 2 pending orders on my Interbank FX demo MT4 account. He said if that broker accepts my 2 pending orders, it's because "they probably have an office location outside of the U.S and are able to offer clients the MT4 platform with the ability to hedge their positions." He said MBTrading's proprietary Navigator platform would have accepted both orders but would never have executed either of them. (Kinda like when Craigslist ghosts an ad because it doesn't meet all their Terms & Conditions.)

IBFX's demo MT4 account accepted both orders. But they were apparently "ghosted" because when the GBPUSD's (ASK) price arrived at my buy limit's price+spread, my buy limit order didn't get activated. I ended up deleting both of those pending orders.

I have read the NFA Compliance Rule 2-43, and it doesn't mention anything about pending orders. I am going to email NFA's Compliance Managing Director, and ask him to explain if the NFA intended for this new Rule to apply to the type of orders I was trying to place. I'll let you know what I find out.