Pointless regulation that is sending me to search for brokers that do allow hedging. I will be doing business with non NFA regulated brokerage houses.

What all experienced Forex traders know is that constantly having to exit and re-enter trades in the same direction is costly, both in terms of spread loss and commission. (And if you're not paying commission, but using a spread profit i.e. "bookie" broker, you're not an experienced trader.) The above analysis doesn't take into account spreads or commissions. The NFA rules now make your cost of trading higher. Say there's a nice long trend, and you're in with Trade#1. But you spot a potential turn. If you just keep your long trade it, and hedge short, and your hedge stops out, then your long positions just continues. That's just two trades. With the new rules, there would be 3 trades. Addtionally, you have spread loss now, for the additional re-entry trade. In summary, the NFA FIFO rule assumes an ideal trading model, where there are no commissions and spreads, and that isn't the real world of trading. Commissions and spreads KILL YOUR PROFIT if you have to enter/exit/re-enter good trades.

I must strongly disagree with the author on his/her position of hedging holding NO advantage, although I would refer the trading I speak of to be COUNTER TRADING -- we have all seen a price moving up towards a most definite TP point, but of course in the meantime, the price stops moving and starts dropping, allowing for either averaging down your position or actually TAKING the short trade

Now I do both, and the current rules in the USA (but fortunately not with the Swiss) prevent that ---- HEDGING, per se, although it controls margin in a positive manner, is prob the least favorable method of trading, based on "guessing" as it is, and NOT knowing, and so I have no real feelings concerning that, but to eliminate the advantage of counter trading in one account (if you hold a long and a short, the margin never moves) and the SPEED of being able to enter the trade, opposed to finding the right trading platform, remembering what you intend to do, and then having to go to the other trading platform to now enter the "averaged down" long trade is a royal pain in the maximus glutimous !

So, being a simple person who accumulates a very decent number of pips in a day, the Swiss strike me as remaining true to their national heritage, and that aint chocolate or cookoo clocks --- its MONEY !

Maybe newbs dont need the ability to counter trade, move VERY fast and trade the 30 second charts, but any scalper heading for a minimum of 600 pips a day MUST have that ability.

enjoy and trade well

mp

Way too many self-professed "professional traders" who announce themselves as such on forums and blogs make me laugh when time and time again, they prove that they are not professional traders. If they were professional traders, especially professional and very profitable scalpers, they would spit on NFA's rulings. Professional traders should trade the opportunities rather than sit on an open position and let it ride for 2 weeks or more. If this is how you trade, yeah, then I guess FIFO is great. But it sucks for professional scamper traders who are and were very profitable and efficient. They along with me, trade opportunities. And opportunities present itself at various moments... minute to minute and seconds to seconds. Now, brokers will handle FIFO rules differently but scalpers will now establish offshore addresses and go there instead rather than attempt to deal with US based and NFA regulated brokers. I am still shocked and dismayed that so many so called experienced traders don't understand what hedging really is.

This angers me so much. Its getting harder and harder to make a profit doing anything in the US. I'm now committed to giving up my US citizenship and moving abroad, just so I can make a living at trading, I'm not going to do it immediately but look into it first to see the best way.

Once out, I can open a corp in a tax free country, like the Cayman Islands. Then I can make profits from my US profits tax free, legally. Why, because little do people know but foreigners are not taxed on profits made in US by USA. I'm not talking about green card wage earners, I'm talking about foreign investments in the US.

As you all said, this person does not consider commissions, nor the impact of introducing complexity. I think this guy was also paid to write this article.

This world is so scary, how governments and the super wealthy who control them, have used computer technology to come up with these regulations to track everything we do and extract as much as possible.

Now see why our own citizen's like Timothy Mcveigh are fighting the feds. Before, I though what he did was lame, but now I see its a war for true life, liberty and the pursuit of happiness. It's going to get a lot worse before it gets better.

The writer of this article is a moron. The new rules have crippled my forex trading. They have cut my profits by 65%. I believe they are also unconstitutional in our supposed "free" society. Let's say you buy a car, and then buy another car exactly the same, a month later. Wouldn't you consider it rediculous for the government to tell you that you have to sell the first car first, before they "allow" you to sell the car you bought second. They have no right to do that. You are not hurting or misleading anyone. The new rules are illegal and unconstitutional in a supposed free society.