NFA Regulation FAQs

Q: What is the new NFA Regulation?

A: On August 2, 2009 the NFA implemented Compliance Rule 2-43 (b) which states, "Forex Dealer Members (FDMs) may not carry offsetting positions in a customer account but must offset them on a first-in, first-out basis."

Q: What is the rational for FIFO?

A: The NFA’s stance is that FIFO provides more transparency to customers, offering a more accurate picture of the P/L on multiple positions than viewing results of individual positions. This also brings the Forex market more in line with the practices of the futures and equities markets.

Q: How will this new regulation impact my GTS Trading Account?

A: The FIFO (First-in, First-out) method for trading means that the oldest trade of an instrument will be the first closed, or reduced, when a trade is done in the opposite direction in that same instrument.

You will no longer have the ability to:

• Hedge†
• Place stop-loss or limit orders against a particular ticket
• Modify or close trade that is not the oldest of a particular instrument

Q: How does trading on GTS under FIFO work?

A: For more information & detailed examples please view our tutorials:

  General Overview Tutorial: Trading under FIFO on GTS
  Live Demonstration Tutorial: Trading under FIFO on GTS

Q: How can I manage my risk under FIFO if I can not place stop-loss or limit orders against a particular ticket?

A: Due to the new NFA FIFO rule there have been some changes to the system to accommodate the new required functionality. To place stops/limits on trades you will need to use entry orders in the opposite direction.

To place an ‘entry’ order, right click on the instrument (or you can use the ‘Order Selection’ feature above the rates), select the order you want, set your price, and set the number of lots you want.

You can set multiple stops and limits if you have more than a 1 lot position by repeating the above process. Each entry stop/ entry limit will appear in your ‘Pending Order’ section on the platform under the ‘Trading’ tab.

NOTE: Once a stop/limit order is placed on an open trade it will appear in your pending order window as 2 ENTRY orders. Should you decide to close the open trade before the stop/limit is triggered, you must remember to cancel the 2 pending entry orders.

To cancel a pending order: simply highlight it, and on the left side click on ‘Cancel’.

Another way to set a stop/limits is by highlighting an open trade and clicking the ‘stops/limits’ button. This will create a one-cancels-other (OCO) order. This order can only be used if you place BOTH a stop and a limit. When one side of the order activates it will cancel the other side of the order. If you do not want both a stop and a limit then you must use the single entry order method as stated above.

For more information & detailed examples please view our "Trading on GTS under the new NFA FIFO rules" tutorial.

Q: How is P/L calculated under the new FIFO regulation?

A: A detailed example is available in our "Trading on GTS under the new NFA FIFO Rules" tutorial or visit Risk Management under FIFO.

Q: Why should I continue trading on the GTS platform?

A: FX Solutions’ continues to enhance our trading platform.

• FX Solutions offers a "Good Until" date for Entry Stop orders and Entry Limit orders, as well as, OCO Orders.
• Recently, we launched convenient in-platform charting for GTS Pro. You can use this chart alone or in conjunction with FX AccuCharts. GTS Charting is a powerful platform for all your technical analysis, with the most popular indicators and drawing tools right at your finger tips.
• A new Education Center has been added to FX Solutions’ website. It includes a comprehensive training course that takes you through the very basics of Forex trading and then covers technical analysis, fundamental analysis, trading strategies and so much more.
• FX Solutions has added the ability to trade Gold and Silver on both our GTS platform and MetaTrader4. For more information visit Spot Metal Trading on our website.
• FIFO is the trading method currently used by Retail Brokerage Houses, Banks, Futures Markets, and Exchanges Worldwide.
• You may continue to manage your risk using stops and limits under FIFO
• Simply use the buy and sell buttons to open a trade, close a trade or reverse a position - No more clicking on an individual position to close or reverse it.

Q: I have a GTS Account, can I avoid these changes?

A: While the GTS platform accommodates many of the new regulations, non-US FX Solutions customers have the option of continuing all current functionality by seamlessly opening an additional account with FX Solutions Australia or FX Solutions UK. This alternative will allow you to:

• Continue to trade on a ticket-based system
• Place stop loss and limit orders on individual trades
• Utilize Hedging functionality†

Q: I have a MT4 Account, can I continue to trade on MT4 with FX Solutions LLC?

A: MetaTrader4 Account Holders:
Existing FX Solutions LLC MetaTrader4 customers will need to transfer their account to continue to use the MetaTrader4 Platform

• Keep your MT4 platform functionality
• Continue to hedge†
• Trade Forex and Spot Metals
• Maintain leverage up to 100:1 on Forex and Spot Metals††
• Deposited funds are held at JP Morgan Chase bank in New York

• FX Solutions UK is a trading name of City Index Limited, is a company registered in England and Wales which is authorized and regulated by the Financial Services Authority (FSA).
• FX Solutions Australia is included within the City Index Group with respect to all financial reporting and capital adequacy requirements under FSA rules. FX Solutions Australia is registered under the business name of IFX Markets Ltd. a wholly owned subsidiary of City Index Group, and is authorized and regulated by the Australian Securities and Investments Commission (ASIC).

Q: Where can I get more information regarding the NFA rule change?

A: The NFA has published a Q&A that may further explain the change. Additionally, you may contact FX Solutions directly at nfa243@fxsol.com.