At the end of the month the NFA are placing in a new rule on its member forex brokers where they need to manage orders in a similar fashion to equities and futures, based on a First in First Out rule on trades on the same pair.  The benefit of this rule is it makes trading more transparent as the trader knows what to expect in the order of the execution of trades.  For example, if you opened two trades on the EUR/USD, then you can expect the first one to be close first.

The downside of this is that  if you have stops or profit targets on your trades such that it is possible to close the second trade before the first, the broker cannot honor the stop or profit target.  This may mean that many pyramiding, grid trading and martingale strategies will no longer work.

How brokers interpret this rule varies immensely.  FXCM for example have spat the dummy and interpreted this rule as meaning that no stops or limit orders can now be honoured and they now urge their clients to open an account in the UK which is regulated differently.   FXCM on their website explain this further.

I asked IBFX how they interpreted this rule and they basically told me that it only applies to positions on the same pair with the same lot sizes and as long as you vary the lot size you are fine.  For example, if you vary your lots sizes by 0.01 lots you should be fine.

What does all this mean?  well first ask your broker.  As for me, I am starting to get a gut full of the NFA and maybe FXCM’s suggestion of using a UK regulated broker is not so silly.