Forex Trading – Lose More than Invested

Thanks to margin, today online forex trading is available to any investor. Margin allows a trader to control 100 – 500 times more the amount of money actually deposited. When there is a chance of profit, there is also a possibility of loss. By borrowing sums that a trader doesn’t actually possess, is it possible to lose more money than invested? Is there a possibility of negative balance? Can you end up owing a large sum of money to forex brokers? And if so, how can you protect yourself from it?

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Forex Trading – Determine Forex Trend

Successful forex trading has a lot to do with determining the overall trend. Without trend awareness, a trader is most likely to suffer unnecessary losses. The trick is to trade in the same direction as the trend, however in most cases it is easier said than done. What is the best method of determining forex trend?

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Trade with Stop and Limits with US-based Forex Brokers

Due to new Compliance Rule 2-43(b), starting from 31 July 2009, traders with US-based forex brokers will be able to use entry orders to place stops and limits. Entry orders help to minimize the losses and provide the ability to profit. 

 In order to use entry orders for stop-loss and limits: 

For Buy Positions

Placing an entry order to sell below the price where you got into the position protects you from additional losses. Placing an entry order to sell above the price where you got in locks in profits.

For example, if you have a BUY EUR/USD position at 1.3900, you could place:

a stop-loss using a sell entry order (Stop Entry, SE) at 1.3800

 

or

 

a limit using a sell entry order (Limit Entry, LE) at 1.4000.

For Sell Positions

Placing an entry order to buy above the price where you got in protects you from additional losses. Placing an entry order to buy below the price where you got in locks in profits.

For example, if you have a SELL EUR/USD position at 1.3900, you could place:

a stop-loss by using a buy entry order (Stop Entry, SE) at 1.4000

 

or

 

a limit using a buy entry order (Limit Entry, LE) at 1.3800.

The National Futures Association (NFA), our industry’s self regulatory organization in the United States, has informed all Forex Dealer Members, which includes FXCM forex broker , that it has adopted new Compliance Rule 2-43(b) regarding forex trading. Read Compliance Rule 2-43(b)

FXCM Broker Offers Account Transfer to FXCM UK Due to New Compliance Rule

The new Compliance Rules 2-43(b) states that forex traders will no longer have the ability to place stop-loss or limit orders. Forex traders will no longer be able to modify or close trades from the ‘Open Positions” window. Hence, any existing stop-loss and limit orders will be removed from FXCM broker accounts after July 31.

While FXCM acknowledges the NFA’s concern and obligation to protect clients, FXCM would like to extend an option to those who would like to continue using stop-loss and limit orders and understand the implications. Traders can transfer their accounts to Forex Capital Markets Ltd. (FXCM UK) and continue to place stop-loss and limit orders and maintain the ability to modify and close orders from the “Open Positions” Window.

Deadline to Complete Transfer Form: JULY 21, 2009

Visit FXCM for more information

FXCM Broker Offers New Risk Management Option

The new Compliance Rules 2-43(b) states that forex traders will no longer have the ability to place stop-loss or limit orders. Forex traders will no longer be able to modify or close trades from the ‘Open Positions” window. Hence, any existing stop-loss and limit orders will be removed from FXCM broker accounts after July 31.

 

In order to offer an alternative risk management to traders, FXCM has introduced a new feature called OCO (One Cancels the Other) entry orders, which will provide traders with the same functionality as stop and limit orders except that they are not linked to any position.

Visit FXCM for more information

New Forex Compliance Rule 2-43(b) from NFA

National Futures Association (NFA), forex industry self regulatory organization in United States, announced that it is now following the new Compliance Rule 2-43 regarding forex trading.

• This rule requires that orders be executed First In, First Out (FIFO). FIFO requires that when multiple positions are held in the same currency pair, the position which was first opened will be the first to be closed. Stop loss and limit orders do not comply with FIFO.
• The NFA’s stance is that FIFO provides more transparency to customers, offering a more accurate picture of the P/L than viewing the results of individual positions. This brings the forex market more in line with the practices of the futures and equities markets.

What impact does the new rule have on traders?

Traders who trade via forex brokers regulated by NFA will no longer be able to place stop-loss or limit orders. The ability to modify or close trades from “Open Positions” window is also no longer available. This major new rule will go into effect after July 31, 2009.

Read Compliance Rule 2-43(b)

Start Forex Trading – Advices and Tips for Beginners

Forex trading is a difficult profession. It takes a lot of time, patience, practice and learning. There are plenty of obstacles and many beginners simply give up. Those who don’t surrender that easily search for tips and tricks to avoid or at least minimize the pitfalls. What kind of advices can help beginners in forex?
 Find how to start forex trading here

How to Start Forex Trading – Forex Guide for Beginners

The popularity of forex trading is rising with more and more people joining the elite option of working from home. As a beginner, however, you might find it difficult to start trading and become frustrated and discouraged by pitfalls and hidden touches. What is the right way to start trading and what are the steps towards becoming successful in forex?

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New NFA Compliance Rule For Forex Orders

NFA Commodity Futures Trading Commission has passed the new NFA Compliance Rules 2-43 regarding forex orders. Forex traders will no longer be able to carry offsetting transactions for any positions opened after May 15, 2009.

For more information, click here