Stop Loss no longer allowed? NFA

[TalonD]

https://admin.acrobat.com/_a205571165/p91063619/

[wrtm_19]

Originally Posted by TalonD

https://admin.acrobat.com/_a205571165/p91063619/

I don´t get it. I've just received an e-mail from Gft telling that they`re not getting any change in the way you trade with them. No changes at all with Gft.

[TalonD]

this is something from FXCM, maybe other brokers are different. Basically they are saying they won't allow stoploss due to the new FIFO rule.
I'm still a newbie so I don't know.

[phil838]

It's not just FXCM, it's all US based brokers. The problem is that stoplosses connected to individual orders are now against NFA rules. But...

Brokers like GFT and Oanda don't really use stoplosses anyway. It looks like a stoploss to you, but it's actually just an opposite pending order that's closing your trade. That's why GFT isn't making any changes... They are already following the new rules and have been for years!

Say you have a long position open at 1.500 for 1 lot. If you want a 50 pip stoploss then a short pending order will be set at 1.450 for 1 lot. If 1.450 is hit your short order cancels out your long order, effectively acting as a stoploss.

The same is true for takeprofit orders. That's where the OCO orders everyone is taking about come in. Your SL and TP will officially be "One Cancels Other" orders, meaning if your SL or TP is hit then the other order is canceled automatically.

You'll still have the protection of "stoplosses" no matter your broker, you'll just have to hit a different button and the "behind the scenes" accounting of it will be different.

[TalonD]

ok, I'm still new enough that some of these order types are still confusing and I sure wouldnt want to trade without a stoploss.

[rokasvivas]

Let me see if I get it. Do you mean that some brokers had the ability to modify your open positions before?

[Clint]

Originally Posted by rokasvivas

Let me see if I get it. Do you mean that some brokers had the ability to modify your open positions before?

No, you (not your broker) had the ability to modify your open position by:

(1) clicking a "Close Position" button to close that particular position

(2) changing your stop-loss on that particular position

(3) changing your take-profit on that particular position

Why did I keep repeating "on that particular position"? Because that's what the NFA is all bent-out-of-shape about. They don't want you to be able to control your exit on any position EXCEPT the first position entered in that pair. This is what they are calling first-in-first-out (FIFO).

Example: You buy one lot of the GBP/USD at 1.6400. The price rises, and you are still bullish. You buy one more lot at 1.6425.
The price rises to 1.6445, and then retraces.

As the price moves back down below 1.6430, you decide to exit your SECOND position for a small profit, before the price dips below your 1.6425 entry price.

The NFA says, "No, you can't exit that position. You have to exit your FIRST position FIRST, and then you can exit your SECOND position."

The NFA, like regulators everywhere in this country, is running amok. These people think THEY should be in charge of everything. They think THEIR way is the only way, and they are trying to take RULES MADE FOR EXCHANGE-TRADED COMMODITY FUTURES and impose them on the off-exchange spot forex market.

I'd like to say that we need to put a stop to these people now --- except that, with the socialists we've put in the White House,
we don't have a prayer.

Clint

[bulhata]

Originally Posted by TalonD

https://admin.acrobat.com/_a205571165/p91063619/

Yes, I also got an e-mail from FXCM - no more stoploss or limit is allowed from Aug 1st on. They also said that they have "one cancels the other" option................
i do not know what to do now, to quit FXCM or "one cancels the other" will do the same as the SL is doing now.

[rtv2]

To Clint, my apologies for not helping you with figuring out how to do what i was doing. That which i described is only a rudimetary way of determining the IP address of your Broker.

To actually ascertain and verify the IP address of your data feed requires a packet capture software program. With this utility you capture the data stream.

To that end i will personally install a packet capture software program, open up a demo account with i believe FXCM UK and verify the data feed. I will start a new thread under newbie island about this, if people believe that this is important enough. I believe this is important and it would be a way for me to contribute to babypips. Unless someone else has already done this, or are doing this at this time.

Warning: Installing unnecesary software on your computer may crash your system. As the market is about to open it might not be a good idea for an active trader to do this. I personally have 12 years experience as a Network/Server Administrator and reinstall my computer software 2-3 times a month.

[Clint]

Originally Posted by rtv2

......To that end i will personally install a packet capture software program, open up a demo account with i believe FXCM UK and verify the data feed. I will start a new thread under newbie island about this, if people believe that this is important enough. I believe this is important and it would be a way for me to contribute to babypips. Unless someone else has already done this, or are doing this at this time......

I have never heard of anyone here doing that before --- so, I'm sure that this will be a first.

What you're offering to do sounds like a lot of work, but if you think it can yield useful information, by all means, have at it.

Clint