Francesc Riverola,
On July 3rd, GFT announced that their platform was fully compliant with all NFA regulations and, as such, customers trading with GFT would not be affected by National Futures Association (NFA) rule forcing Forex dealers to discontinue the use of stop and limit orders to protect positions.
Today we got Gain Capital - Forex.com -announcing that FIFO rule will not affect their customers so they will be able to keep using stops and limit orders when trading with Forex.com.
Let’s see who will be the next to move
Francesc
Dear Partner:
As you are probably aware, beginning on August 1, 2009, a new NFA compliance rule will go into effect for US regulated firms. This rule will require customer orders to be executed on a first-in, first-out (FIFO) basis. However, FOREX.com customers will not be affected by this new rule, as our proprietary trading platform FOREXTrader already uses the FIFO method and is fully capable of supporting this change.
Below is an email that was sent to all FOREX.com customers today. If you should have any questions, please do not hesitate to contact GAIN Capital Partner Services at +1.908.731.0724, or at partnerservices@gaincapital.com.
Regards,
GAIN Capital Partner Services
IMPORTANT ACCOUNT NOTICE: First in First out (FIFO) Order Execution Policy
Dear FOREX.com customer:
On August 1, 2009, a new NFA compliance will go into effect for US regulated firms. NFA Rule 2-43(b) requires that customer orders be executed on a first-in, first-out (FIFO) basis.
As a FOREX.com customer, you WILL NOT be affected by this new rule.
Our proprietary trading platform, FOREXTrader, uses the FIFO method and is fully capable of supporting this change. You can continue to enter stop and limit orders, modify existing orders, as well as utilize all other advanced order types available on the FOREXTrader platform, including One Cancels Other (OCOs) and Trailing Stops.
FIFO Example
With the first-in, first-out (FIFO) method, when multiple trades are executed in the same currency pair to establish a position, the trade which was first opened is the first closed.
Trade Date Trade Time Position
29-Jul 10AM Buy 10,000 EUR/USD @ 1.4000
30-Jul 12PM Buy 50,000 EUR/USD @ 1.4050
30-Jul 2PM Buy 20,000 EUR/USD @ 1.4100
31-Jul 11AM Buy 10,000 EUR/USD @ 1.4150
Total Buy 90,000 EUR/USD @ Average Price
With FIFO order execution, if you are long 90,000 EUR/USD and sell 10,000, the earliest trade (from 29 Jul) is closed.
Should you have any questions about this notice, please don’t hesitate to call us at 1.877.FOREXGO or 1.908.731.0750 or email support@forex.com
Thank you for your continued business.
Member, National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors.
Trading forex carries a high level of risk and is not suitable for all investors. Spot Gold contracts are not subject to regulation under the U.S. Commodity Exchange Act.
This e-mail contains confidential information belonging to FOREX.com and is intended solely for the addressee. The unauthorized disclosure, use, dissemination or copying (either whole or partial) of this e-mail is strictly prohibited. If you have received this communication in error, please notify us immediately by email and delete the original message and attachments. FOREX.com does not warrant the accuracy or completeness of the information contained within this communication.
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FOREX.com is a registered Futures Commission Merchant (FCM) (NFA ID #0339826) and a division of GAIN Capital Group, LLC. FOREX.com, 44 Wall Street, New York, NY 10005. Copyright ©2009 FOREX.com. All Rights Reserved.
Why should using FIFO method when multiple trades are executed in the same currency pair?
My friend with 3 years trading experience suggest me to avoid using FIFO method. But I don’t know his reason. Would you please explain more? Thanks before.