CFTC Rules Effective October 18, 2010

[Jason_Rogers]

@Compujock

Some NFA brokers are not allowing hedge trades and are enforcing FIFO rules. So when you click to make the trade in MT4 it says “Trade Not Allowed” or similar. I just wanted to verify that FXCM handles the rules on the back end with accounting and does not force the rules on the trader. As a test, I took a .01 buy on my FXCM MT4 platform and then a .02 sell on same pair. Then I closed the .02 trade first, and then the .01 trade. So it appears with FXCM it is handled on the back end.

Still, I would like to hear Jason Roger’s official statement on this.

Hi Compujock,

The order functionality in the MT4 interface will allow you to close positions non-FIFO, but the accounting on the back-end will still close the orders according to FIFO.

The same is true with hedging. You can hedge trades on the MT4 interface, but the accounting on the back-end (when you check your statement through www.myfxcm.com) will show the positions having offset each other. This applies to MT4 with FXCM US (FXCM.com).

I also agree with rhodytrader on the general point about trading and the accounting basis of the trades…

@rhodytrader

The NFA rules are not about the trades. They are about the accounting… It in no way alters your bottom line profitability.

-Jason