Hello Dynamic Traders,
As most of you will be aware the new NFA regulations have come into force and you may see some new additions on your trading account on Sunday night (GMT).
Those of you who hedge on your currency accounts will no longer be able to continue this practice. The NFA FIFO rule that is in place (for US accounts only) is to prevent the ability to hedge. If you open multiple position on a currency, until now most of you (depending on broker) have been able to close whichever position you wanted and in whatever order you wanted. The FIFO rule (first in first out) means you can now close only the first position first and then the second position second. In other words, the order in which you opened your multiple positions on that currency is the order you will have to close them.
Also, if you take out a long position on a currency lets say using our Double Deviation strategy and you decide you want to take out a short positon on that same currency using our 3D strategy, then in effect what will happen is your 3D position will close your Double Deviation position. The short position will not open because a long position is already in play, so instead now the short position will actually close all or part of the original long position.
To get around the above issues, you can move your broker to the UK account broker if they have one or close that account and open a spread betting account in the UK (if your not a US citizen). If you really want to continue with your current US broker, then if they allow this, you can open multiple accounts so then you can choose one account to always use for long positions and you can use the other account for short positions. This will be the same as hedging but across two accounts with the same broker. However, the first in first out ruling will still stand but that should not really be much of a concern to dynamic traders from they way you all trade based on what you have been shown of the members webinars.
Another trading month is over and most of you will have had some very good trades so now it is time to enjoy the weekend, do not think about trading until you perform your analysis.
Do not forget to visit our other forex blogs.
Good dynamic trading.