Proposed NFA Capital Requirement - page 56
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Very important ! No more hedging with IBFX!
Hi everyone,
The NFA (National Futures Association) has bought in a rule to ban hedging !! Eg: Can no longer hold both a long and short position on one currency at the same time. This is huge news, and seems a bit corrupt to me this does not benefit the small trader at all and does nobody any harm ! Anyway only brokers regulated by the NFA will be affected. Unfortunately the largest MT4 broker InterbankFX is regulated by them and I received an email (below) from them stating no more hedging with IBFX - thought everyone would like to know. What do you think to this ?
Dear Customers:
Interbank FX, along with all FCM's, has received information from the NFA that we wanted to pass along to our customers. All registered FCM's have received a new Compliance Rule 2-43 regarding forex trading. On May 15, 2009, forex customers will no longer be allowed open "hedged" positions in their accounts. Please see an excerpt from the new NFA rule below. If you are currently using Hedging as a trading strategy, we would encourage you to use the Interbank FX Demo accounts over the next month to help modify your trading strategy. Also, for those of you who utilize hedging strategy with your "Expert Advisors", we would encourage you modify your code and test your advisor on the Interbank FX Demo servers as well. In order to assure a smooth transition for our customers to the new NFA Compliance Rule, Interbank FX has set May 8, 2009 as the last date that customers will be able to Hedge open positions.
Interbank FX is committed to providing our customers with superb tools, real time news and analytics to help you to be a successful trader. Please do not hesitate to contact one of our customer service professionals if you have any questions.
Best regards,
Todd B. Crosland
Chairman and President
Notice to Members I-09-10
April 13, 2009
Effective Date of NFA Requirements Regarding Forex Orders
NFA has received notice that the Commodity Futures Trading Commission has approved new NFA Compliance Rule 2-43 regarding forex orders. The prohibition on carrying offsetting transactions will be effective for any positions established after May 15, 2009.
Click here for more information.
*According to gftforex.com
I am dissapointed
I am disappointed with ibfx because of banning hedging.
I use martingale strategy in my trading. I open positions in opposite direction and follow martingale. SO Is that prohibited now?
DOes anybody know if FXDD will prohibit it as well?
I am disappointed with ibfx because of banning hedging.
I use martingale strategy in my trading. I open positions in opposite direction and follow martingale. SO Is that prohibited now?
DOes anybody know if FXDD will prohibit it as well?All brokers following NFA regulations will prohibit it.
just rewrite the EA that instead of using hedging it opens and closes trades.
Hedging is just an artifice
for instance, instead of
Time 1: long 3 lots
Time 2: short 2 lots (hedge)
Time 3: close 2 shorts (hedge)
Time 4: close 3 longs
just do
Time 1: long 3 lots
Time 2: close 2 lots
Time 3: open 2 longs
Time 4: close 3 longs
it is exactly the same thing
All brokers following NFA regulations will prohibit it.
just rewrite the EA that instead of using hedging it opens and closes trades.
Hedging is just an artifice
for instance, instead of
Time 1: long 3 lots
Time 2: short 2 lots (hedge)
Time 3: close 2 shorts (hedge)
Time 4: close 3 longs
just do
Time 1: long 3 lots
Time 2: close 2 lots
Time 3: open 2 longs
Time 4: close 3 longs
it is exactly the same thingOh, you mean i just cant have same contract size in opposite directions?
Time 1 Long 3lots
Time 2 Short 3Lots
This is prohibited
But i can have
Time1 Long 3Lots
Time2 Short 2 Lots
Is that right?
Yes they will be prohibiting this, this is what they told me yesterday.
I am disappointed with ibfx because of banning hedging.
I use martingale strategy in my trading. I open positions in opposite direction and follow martingale. SO Is that prohibited now?
DOes anybody know if FXDD will prohibit it as well?Oh, you mean i just cant have same contract size in opposite directions?
Time 1 Long 3lots
Time 2 Short 3Lots
This is prohibited
But i can have
Time1 Long 3Lots
Time2 Short 2 Lots
Is that right?No, it was not what I meant.
You won't be able to hedge whatever the lot size.
What I meant was, whatever you use the hedge for, you can trade the same way without using the hedging option.
FXCM Buys I Trade FX
Looks like I Trade FX is throwing in the towel. With the NFA fining them $250,000 over the Olint affair and the $20 million capital requirement set to kick in I Trade FX is officially calling it quits: FXCM Acquires Clients of i-Trade FX
New York―May 4, 2009―Forex Capital Markets LLC (Forex | currency trading | forex trading | forex broker) today announced it has reached an agreement to acquire the U.S. and international retail forex clients of i-Trade FX. Subject to regulatory approval, accounts are expected to be transferred from i-Trade FX to FXCM on May 8, 2009. Like several other forex firms, i-Trade FX has decided to cease offering service to US retail clients. Other firms that have decided to exit the U.S. retail business include ODL Securities, Hotspot FX, and CMC Markets. To offer retail forex trading services under NFA rules, Forex Dealer Members (FDMs) will be required to have a minimum of $20 Million in firm capital as of May 16, 2009.
The U.S. industry consolidation should continue in the months to come as cap increases and a battery of new regulations continue to squeeze the market.
Next up, CFTC Net Capital report for March.