What was the rational to ban Americans from hedging Forex positions?
Seems counter-intuitive.
I don’t know the real reason but I personally think that hedging is somehow considered as an aggressive trading method. So many brokers don’t allow hedging to their customers.
but how is it aggressive? basically it can be the opposite.
I guess they just don’t want people to hold too many open positions? maybe that can be considered “confusing” and therefore “dangerous” ?
To be honest, I don’t see how hedging can be aggressive. There are some pro and cons of hedging but IMO you should be able to decide by yourself whether you want to hedge or not. Beside that here is what the Compliance Rule 2-43 of the National Futures Association (NFA) from Dec 2008 explains: https://www.nfa.futures.org/news/PDF/CFTC/CR2_43_ForexPriceAdj_112408.pdf
Were? When was the ban lifted?
They banned it several years ago with the reason that without it, new traders’ accounts will be more “protected”. I do not agree with this and do not think that this is the real reason, to this day it’s not quite clear why they took these measures. I don’t consider hedging as aggressive or illegal as well and all these “protecting measures” lately start to be really annoying. It seems to me that governments just wish to push retail traders way…Time will show if I’m right.
Hm. I am not an American nut based on what I read on the Internet the “ban” is still there and people are opening different accounts for longs and for shorts to go around that limitation. Maybe someone with more closer view on the USA FX market can give more details.