FAQs: Trading Under the FIFO Rule

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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."

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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.

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For more information & detailed examples please view our tutorial:

  Live Demonstration Tutorial: Trading under FIFO on GTS

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Due to the 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 "Live Demonstration Tutorial: Trading under FIFO on GTS" tutorial & "Risk Management on GTS under FIFO".

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An example is available at Risk Management under FIFO.

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FX Solutions’ continues to enhance our trading platform.

• You have the ability to:
  • Close Different-Sized trades, of the same currency pair, in whatever order you choose from the “Open Trades” window of your platform. Simply click on a trade and close it whenever you choose. View Tutorial
  • Attach Stops and Limits to Individual Trades. From the “Open Trades” window, attach stops and limits to trades of different sizes. This functionality is also available to trades of the same size as long as the trade is the oldest trade of that size and that currency pair.
  • Trailing Stops and Limits. The stop price automatically adjusts as the price goes your way limiting losses and locking in potential gains.
• 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.
• FIFO is the trading method currently used by Retail Brokerage Houses, Banks, Futures Markets, and Exchanges Worldwide.
• 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.

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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 in the 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†

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MetaTrader4 Account Holders:
Non-U.S. MetaTrader4 customers have the option of transferring their account to FX Solutions in the UK to continue to trade on the MetaTrader4 Platform

• Continue to hedge†
• Trade Forex
• Maintain leverage up to 400:1 on Forex
• Deposited funds are held at JP Morgan Chase bank in New York

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FX Solutions in the UK and FX Solutions in the U.S. are owned by City Index Limited, which is a UK based firm regulated for the conduct of investment business in the UK by the Financial Services Authority (FSA).

• FX Solutions UK is a trading name of City Index Limited, a company registered in England and Wales which is authorized and regulated by the Financial Services Authority (FSA).

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