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Petition to repeal NFA Compliance Rule 2-43(b) for FIFO / Offsetting Transacti

gpcode
Sep 24 2014 at 11:39
7 posts
Dear friends,

I wanted to let you know about a new petition I created on We the People, a new feature on WhiteHouse.gov, and ask for your support. Will you add your name to mine? If this petition gets 100,000 signatures by October 19, 2014, the White House will review it and respond-

You can view and sign the petition here:

https://wh.gov/ilWF8

Here's some more information about this petition:

Petition to repeal NFA Compliance Rule 2-43(b) for FIFO / Offsetting Transactions for ForEx trading

I wish to express opposition to NFA Compliance Rule 2-43(b) concerning Offsetting and FIFO (First In-First Out) Transactions and call for the repeal of this section as it pertains to retail-level ForEx trading for US residents and brokerages. This rule has since prohibited the freedom to utilize beneficial trading resources such as offsetting (commonly referred to as 'hedging'), as well as the freedom to close each trade, choose take profit, stop loss and trailing stop values for each order without the interference currently caused by the FIFO aspect of the rule. I did not ask for these restrictions and firmly disagree that those freedoms now prohibited 'were of no benefit to the trader'. I believe that restoring these freedoms will help ForEx clients manage trades more successfully.
forexwiz
Sep 25 2014 at 07:17
16 posts
Why not try FinFX? They accept US clients and without fifo ruling.
There is nothing lost or wasted in this life
gpcode
Sep 25 2014 at 08:44
7 posts
Hi forexwiz,

Believe me, I would do it in a heartbeat but don't want to be a test case for whether doing business this way is legal or not...😕
gpcode
Sep 25 2014 at 10:00
7 posts
My hope with the petition is to restore when retail-level ForEx clients and brokerages in the US can once again enjoy the freedom to trade like the rest of the world, without an offset 'hedging' ban and FIFO restrictions that I neither wanted nor asked for- and the return of foreign traders and investors, jobs, opportunities as well as tax revenues that seem unlikely to return here until this rule is repealed. I welcome all to visit the site and sign the petition, your help will be appreciated- Thank you!
forexwiz
Sep 25 2014 at 15:05
16 posts
FIFO ruling is definitely a shackel and is not helping or protecting the retail traders. It's a worthy cause to petition.
There is nothing lost or wasted in this life
forexwiz
Sep 25 2014 at 15:05
16 posts
@gpcode ,
I am running my trade strategy on 2 accounts: 1) NFA and cftc ruling and 2) with none. I started this evaluation to proof the US trade restictions are not good, at least to my trade system. You can see how my trading results defer between 2 accounts. I believe the 50:1 and fifo ruling are BS. I get stopped out more often and get stuck in the trade too long based with nfa/cftc rulings.

https://www.myfxbook.com/members/forexwiz

There is nothing lost or wasted in this life
Matthew Copper (CopperCM)
Sep 25 2014 at 20:42
8 posts
sirius1fx (sirius1fx)
Sep 25 2014 at 20:43
348 posts
good look on this petition, these scammers need to be stopped...

its solely benefiting the market makers, has nothing todo with trades...
if you follow the flock like sheep you always end up stepping in shit!
gpcode
Sep 25 2014 at 20:52
7 posts
Hi forexwiz,

I agree and thank you for your insight and especially your latest post- it shows quite a difference between the two accounts, with only about 6% more DD but is approaching double the gain in favor of the account without the restrictions- very impressive indeed😄

I happen to favor leverage above 1:50 also as many strategies and especially grids I've used are actually more stable and effective at the higher number- A leverage petition is something I would definitely support! I focused on the 2-43(b) rule first though, as one repeal may be a more obtainable goal and seems to be the final straw for those with a choice to go elsewhere....
gpcode
Sep 25 2014 at 21:49
7 posts
Thank you for your replies so far, here is a link for a short video with some more background at youtube:

forexwiz
Sep 26 2014 at 07:38
16 posts
I have signed up too😎
There is nothing lost or wasted in this life
LoveA
Sep 27 2014 at 07:22
11 posts
I don't understand why someone needs to hedge his/her positions which is just like to fight on his/her own. If you think the market go against your position, why not just close it instead of opening up a opposite position to worry about. If you think the market just pull back and will go back to your favor, than what you are going to do with the opposite position. Hedging your positions only good for the broker because you just take more trades.

However, higher leverage may be a good go.

Just my own view.
sirius1fx (sirius1fx)
Sep 28 2014 at 06:29
348 posts
LoveA posted:
I don't understand why someone needs to hedge his/her positions which is just like to fight on his/her own. If you think the market go against your position, why not just close it instead of opening up a opposite position to worry about. If you think the market just pull back and will go back to your favor, than what you are going to do with the opposite position. Hedging your positions only good for the broker because you just take more trades.

However, higher leverage may be a good go.

Just my own view.

You just made an highly subjective statement that no one here would be wise to listen to...

Have you ever heard of something called inverting your leverage?

Just because you dont understand margin/hedging/leveraging doesn't mean others should follow in your footsteps, its about freedom of trading, and your understanding of the markets..

Hedging is a artform and if done correctly can offset all losses using no stop loss all while avoiding margin call...😉
if you follow the flock like sheep you always end up stepping in shit!
gpcode
Sep 28 2014 at 17:59
7 posts
Hi LoveA,

Thank you for sharing your view and offsets are nothing to be afraid of! 😄They can be stopped, started and used in combination with the preference that you’ve mentioned, partly or fully based on time, lot size, price levels etc. and your example can actually be incorporated into a number of hedging strategies or vice versa.

I invite all to visit the YouTube link, as the issue in the petition is to restore being able to freely decide how to close each and any open order of the same currency pair in any combination or sequence the trader chooses, as well as freedom to use a versatile resource like 'hedging' when appropriate. These can provide clients with many benefits for strategy testing, grid and other trading methods, risk management, recovery from bad trades, and protecting margin, any of which can help clients to manage their accounts more successfully.

The freedom to use hedging does not at all mean to never close bad trades! It simply means opening equal or unequal long and short orders of the same currency pair during the same time in one account, and positions can be partly or fully offset for whatever period of time is needed. It actually is a tool that can help manage risk and closing bad trades can be done in a controlled manner at more appropriate times as part of one or even overlaid strategies of which there are many variations....

The advantage of these capabilities being contained in one account, with readily available statistics for account management, is something that I view would benefit the trader. I've read from those who do not use these methods that the broker is somehow benefiting during the time orders may be open in opposite directions, the trade though would have cost the same in spread to open whether kept open or closed, It wouldn't bother me even if it was a little more to pay swap for the privilege as it is a useful tool.

For example you’ve mentioned taking a loss and being concerned about what to do with positions that go against you- all pairs have a 'personality' and I can simply wait for retracement, reversal, scale in and out or can lock down positions until a decisive breakout happens, exit lossy positions when ready and let the market go where it wants to. Success at hedging or offsetting like anything else comes with using the tools properly, and these tools have allowed me to enjoy success in a number of ways where I have failed without them.

FIFO rules prohibit offsets, but also prohibit more than one open order even in one direction of the same currency pair from being closed unless the first (oldest) order is closed first, then the next can be closed and so on in sequence....unless you are willing to accept them all to be forced closed at the same value and time by entering either a value for stop loss, take profit or trailing stop... Trading platforms without these restrictions programmed into them will be disabled, and so many useful strategies whether offset or one direction only will no longer work.

The rest of the world have no restrictions of this kind on their residents, and are not campaigning to have them taken away. It seems unfair that I would have to uproot and move outside the US to be able to trade without these again- as a US resident I simply wish these freedoms to be restored😄
gpcode
Oct 09 2014 at 20:31
7 posts
Just to clarify, only 150 signatures are required for the petition to remain available at the WhiteHouse.gov site and will also be submitted to the NFA once a sizable number is reached- If this petition gets 100,000 signatures by October 19, 2014, the White House will review it and respond-
PayPip (PayPip)
Oct 10 2014 at 00:29
28 posts
LoveA posted:
I don't understand why someone needs to hedge his/her positions which is just like to fight on his/her own. If you think the market go against your position, why not just close it instead of opening up a opposite position to worry about. If you think the market just pull back and will go back to your favor, than what you are going to do with the opposite position. Hedging your positions only good for the broker because you just take more trades.

However, higher leverage may be a good go.

Just my own view.

Because hedging is portfolio management (along with trading small). Back in the day when there was open outcry floor trading it was their job to facilitate your order. Meaning, they would take the other side regardless of direction, now if their book was getting to heavy either long or short they would look to flatten out their deltas (hedge their book). Why? Because they did not give a shit about direction. They did not have news or charts or any of the other crap that traders now days think matter. What they did have was wider spreads and the understanding that they had no clue what direction the markets would go from day to day.

So what does hedging afford you, it reduces directional risk and buys you TIME. Time for cyclicality to work in your favor. Example I've been short the pound since 9 /13. great call I know lol. The pound shot up about 2% that month against my short contracts. I started hedging about half my contracts and have been taking profits for 3/4 of a year trading the pound long against my short contracts. This has reduced my overall exposure to my initial directional trade. OK now 4 months ago cyclicality kicked in and I still hold my short contracts from 9/13 and have some much smaller long positions. At this point I'm up money on the original trade even though I'm about 615 pips out from my original entry. If I can scratch the original trade I'll be a very very happy camper.

Moral of the story... do not think you have a clue about direction, it's OK to have a directional bias but keep it small and wait for cyclicality to kick in.
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