Thread: 3) Questions and Answers

Originally Posted by Jason Rogers

Trailing stops will not be available through FXCM US after FIFO is enacted, only through FXCM UK.

I suspect you mean "Dynamic Trailing stops using FXCM Trading Station II will not be available...".

As a trailing stop is just a stop order that you move based on market conditions and you have stated that I am able to place entry stop orders still, I fully expect to be able to place entry stop orders and then move or trail them in response to market conditions. The FIFO rule change does not seem to affect this. It just makes it so the stop order cannot offset a specific trade when filled but instead offset the first (oldest) unfilled opposing trade.

It would be unfortunate for your FXCM Trading Station users who wish to use your new Dynamic Trailing stops feature to be denied the feature if they continue on FXCM US accounts.

If we are able to place entry stop orders (ala FIX_ENTRYSTOP) and if we are able to modify the entry stop order's price over time, I fully expect that Track 'n Trade LIVE Forex will continue to support visual chart-based dynamic trialing stops as well as manual trailing stops with any FXCM account including US accounts post-FIX.

Guys, I have heard that this decision to remove stops and limit orders is the decision of FXCM and not NFAs. Other US brokers are not doing this so I wonder what is FXCM trying to gain here. Is it that they are trying to get all their customers to go over to the UK fraction of FXCM? Something doesn't sound right.

The First In First Out rule that goes into effect says if you open 1 STD Lot on April 3rd and 1 STD Lot on April 5th you have to close the trade opened on April 3rd first. It doesn't say that all stop orders and limit orders will be removed.

Why is it that we have not seen any other US broker talking about this? I think FXCM owes us a little more explaining.

Hi Jason,

Please help me understand more about OCO orders. Let's say EUR/USD is currently at 1.3975. I anticipate it will fall to 1.3950 then bounce back up to 1.4000. So I would like to create an entry order to buy at 1.3950. I also want to create an OCO order to sell at 1.4000 with profit (equivalent of limit) and another to sell at 1.3900 with loss (equivalent of stop). If the price didn't fall to 1.3950 but rose to 1.4000, will my OCO sell order trigger?...I would like my OCO sell order to trigger only after my initial entry buy order triggered.

Tatsuo

The whole argument about forbidding stops and limits rests upon the lie that it applies to FIFO, the order execution of all positions. This must be true if your video explaining the new NFA rules is correct.

My trading plan requires a SINGLE lot position in a single pair, so my questions to FXCM are:

1) Why do you accept the NFA argument to remove stops and limits if cases like mine prove the NFA wrong? Regular stops and limits should be allowed, must be enabled, if a single position is involved since there is no reason to forbid them. Am I the only trader in your customer base with this extremely basic trading plan?
2) Didn’t anybody at FXCM noticed the NFA argument is erroneous from the beginning?
3) The more I think on the NFA argument, the more convinced I am it is only an excuse to make trading, which is hard for the new small investor as it is, harder. As an alien resident of the US I was aware of the many arbitrary US government policies, nothing new there. Is FXCM quietly going to partner with some wrongdoers who could'nt find any other way to stop people (AKA speculators) from profiting from FX? If so, perhaps the UK authorities deserve my micro account after all.

For American traders it is going to be a sad 4 of July.

Originally Posted by jlanawalt

I suspect you mean "Dynamic Trailing stops using FXCM Trading Station II will not be available...".

As a trailing stop is just a stop order that you move based on market conditions and you have stated that I am able to place entry stop orders still, I fully expect to be able to place entry stop orders and then move or trail them in response to market conditions. The FIFO rule change does not seem to affect this. It just makes it so the stop order cannot offset a specific trade when filled but instead offset the first (oldest) unfilled opposing trade.

It would be unfortunate for your FXCM Trading Station users who wish to use your new Dynamic Trailing stops feature to be denied the feature if they continue on FXCM US accounts.

If we are able to place entry stop orders (ala FIX_ENTRYSTOP) and if we are able to modify the entry stop order's price over time, I fully expect that Track 'n Trade LIVE Forex will continue to support visual chart-based dynamic trialing stops as well as manual trailing stops with any FXCM account including US accounts post-FIX.

hi Jacob,

The FX Trade Station II itself won't have a trailing stop for FXCM US accounts. I will forward your question to our systems desk to check on the availability for FIX API.

Jason

Originally Posted by gmcl

Guys, I have heard that this decision to remove stops and limit orders is the decision of FXCM and not NFAs. Other US brokers are not doing this so I wonder what is FXCM trying to gain here. Is it that they are trying to get all their customers to go over to the UK fraction of FXCM? Something doesn't sound right.

The First In First Out rule that goes into effect says if you open 1 STD Lot on April 3rd and 1 STD Lot on April 5th you have to close the trade opened on April 3rd first. It doesn't say that all stop orders and limit orders will be removed.

Why is it that we have not seen any other US broker talking about this? I think FXCM owes us a little more explaining.

hi gmcl,

It's important to read the full context of the email and press release. Stop/limit order functionality itself on the FX Trade Station is being removed, and replaced with OCO orders which will be used instead. Risk management is still very important which is why the OCO order functionality is being released on the weekend of August 1. You have the option to stay with FXCM US and use OCO orders, or move to FXCM UK and continue using the FX Trade Station as you always have, with the added benefit of your account being segregated in accordance with FSA regulations.

For our traders familiar with how the FX Trade Station currently operates, you are able to open multiple positions in one currency pair and place a stop/limit individually on each ticket. This will not be possible with FIFO since it would give you the option to close the last position opened first. In order to comply with FIFO stops/limits will be removed and OCO orders need to be applied instead. Here is a video on how the OCO orders work
http://forexforums.dailyfx.com/nfa-f...ifo-video.html (2-a) NFA FIFO Video)

-Jason

Originally Posted by gmcl

Guys, I have heard that this decision to remove stops and limit orders is the decision of FXCM and not NFAs. Other US brokers are not doing this so I wonder what is FXCM trying to gain here. Is it that they are trying to get all their customers to go over to the UK fraction of FXCM? Something doesn't sound right.

The First In First Out rule that goes into effect says if you open 1 STD Lot on April 3rd and 1 STD Lot on April 5th you have to close the trade opened on April 3rd first. It doesn't say that all stop orders and limit orders will be removed.

Why is it that we have not seen any other US broker talking about this? I think FXCM owes us a little more explaining.

If you are right, I just want to thank FXCM and close my account. By the way, on the urgent email dated Wed 7/01/09, FXCM gave us two choices, to use OCO orders or switch to the UK account. I would like to explore the third option after reading your post and all the Terms of Business of FXCM UK, which are not nice at all for Micro account users.

1) How do I close my FXCM account due to this stop/limit issue? Is FXCM going to charge me anything if I choose to close my account due to the way NFA rules are executed by FXCM? Enough is enough.

2) In case I decide to go ahead for the UK FXCM account, which Terms of Business should apply to us hereafter, the Terms of the US account or the ones of the UK account? Or both (at our choice)?

Whatever I decide to do depends on your answers.

Dear All,

Just asking, after the account transfer to FXCM UK,
My trading remain with existing TradeStation or I have to download a new TradeStation (UK version) ?
My question may sound stupid but I need someone to answer pls.

ThankU.
AhmadAlbab.

What are the tax consequences, if any, to U.S. citizens with accounts in the U.K.?

The following is directly from the NFA's website, and from how I read it, it sure does sound like it has only to do with hedging, and not anything to do with stop-loss and limit orders. Also, I have not seen anything on any other U.S. Forex dealer's website with regard to removing stop-loss and limit-order capabilities. I have contacted the NFA to ask specifically how 2-43(b) applies to stop-loss and limit orders, and should have an answer soon. Can someone at FXCM clarify?

Offsetting Transactions

New Compliance Rule 2-43(b) requires an FDM to offset positions in a customer account on a first-in, first-out basis, thereby prohibiting a trading practice commonly referred to as "hedging." A customer may, however, direct the FDM to offset same-size transactions even if there are older transactions of a different size. Rule 2-43(b) is effective for any positions established after May 15, 2009. Offsetting positions that were established prior to the effective date do not have to be liquidated, but once either position is closed out after May 15, it may not be reestablished as a hedge.

Part 2 - RULES GOVERNING THE BUSINESS CONDUCT OF MEMBERS REGISTERED WITH THE COMMISSION
* * *
RULE 2-43. FOREX ORDERS.
(b) Offsetting Transactions

Forex Dealer Members may not carry offsetting positions in a customer account but must offset them on a first-in, first-out basis. At the customer's request, an FDM may offset same-size transactions even if there are older transactions of a different size but must offset the transaction against the oldest transaction of that size.

Originally Posted by gmcl

Guys, I have heard that this decision to remove stops and limit orders is the decision of FXCM and not NFAs. Other US brokers are not doing this so I wonder what is FXCM trying to gain here. Is it that they are trying to get all their customers to go over to the UK fraction of FXCM? Something doesn't sound right.

The First In First Out rule that goes into effect says if you open 1 STD Lot on April 3rd and 1 STD Lot on April 5th you have to close the trade opened on April 3rd first. It doesn't say that all stop orders and limit orders will be removed.

Why is it that we have not seen any other US broker talking about this? I think FXCM owes us a little more explaining.

Unfortunately, the decision to remove stop & limit orders will affect other brokers too.
I contacted GainCapital (pretending to be one of its customers) and they said this will apply from August 1st to all of their accounts.
I think many other brokers will announce those important changes in next weeks...FXCM just did it before anyone else.

Certainly, those new NFA rules really are a bit strange. I'm not a U.S. citizen, so I don't know whether this has something to do with Obama's plan to rebuild financial world or not, but I really don't get which should be their benefits...maybe more stability in the Forex market? If so, did we really need it? Surely it would have been better to let out from those changes individual investors.

You are correct, averageinvestor. I should not have opened my mouth without doing more research. Apparently some brokers are being affected, but not others. GFT continues to offer stop-loss and limit orders, for example.

Hi Jason
I requested my account to be transferred to FXCM UK, and I filled the form online, is all the requests will be processed or for some reasons FXCM may prevent some account to be transferred to UK?

I do normally add to a position on a continuance of a retrace and FIFO will harmfully reduce my ability to manage my positions, in addition it will be long process to close a multiple positions for multiple pairs if I want to close at market price, before we have an option to close all positions by one click from FXCM Trade station, that well not work anymore.
I think there are no much options and the stick become too high.

Is there a minimal account to deposit fund via credit card into Micro UK account after the transfer?

I got the following error when try the following. "Amount cannot be below 2,000 or above 10,000." Is that restriction applies to both standard and micro account?

FXCM - Depositing Funds Options

I also read elsewhere in this forum that wire transfer is the only option to withdraw funds from Micro UK. So to get the money back to US, there is a $40 charge. Is that correct?

When I fund Micro UK account using a US credit card, what is the minimal and maximal amount? I got the following message. Doesn't seem to be reasonable for a micro account.
"Amount cannot be below 2,000 or above 10,000."

Also, I read somewhere in this forum that the only way to withdraw from Micro UK account now is wire transfer. Which means that there is a USD40 fee to transfer money back to US. Is this true?