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No Stop Loss on Open Orders for US Brokers: Important Announcement from National Futures Association

Further to the recent announcements regarding no hedging for US Forex Brokers, the National Futures Association (NFA), the self regulatory body for forex brokers in the United States has now introduced another major compliance ruling under the NFA Compliance Rule 2-43(b). This new rule prohibits US Forex Brokers from offering stop loss or limit orders to their traders and from modifying or closing trades from open positions as from 1st August 2009.

The NFA has imposed these new rules as it believes that FIFO (first in first out) execution, a process commonly practiced in equities and futures markets, provides more transparency and a more accurate picture on multiple positions profit and loss. Any clients with existing positions on July 31st will have their orders removed and any stop loss or limit orders with many US brokers will be disabled or deleted as a result of this ruling.

This means that any Metatrader4 users who wish to maintain their current MT4 trading platform’s functionality will need to transfer to non-US brokers as the combined changes will result in traders having drastic limitations to their risk management options and the vast majority of MT4 expert advisors will no longer function.

As a Swiss Forex Broker operating in Europe, Tadawul FX is not bound by this US regulation and whilst appreciating that the NFA’s aim is to increase transparency, TDFX still continues to offer traders the option of stop loss and limit features and the ability to modify and close from open positions.

Of the decision, Ramzi Chamat, CEO, Tadawul FX, says: “We strongly believe that stop loss and limit orders offer many of our trading clients improved risk management and most of them continue to use these methods effectively over time to trade profitably and minimize and manage their risk. As an MT4 broker also offering trading with Expert Advisors we feel it is important not to limit the functionality of this excellent trading platform or EAs and as a non-US broker, we will continue to offer these options to our clients.”

If you wish to trade using stop loss and limit orders or hedging which is also prohibited, you can visit our online live forex account opening form which allows you to quickly and easily open your trading account with us. You may also fund your account using PayPal or credit card payment on our secure online funds deposit page.

If you are an existing Tadawul FX client and would like further information on the above NFA regulation, we would be happy to hear from you and provide further assistance at support@tadawulfx.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

OFFICIAL NFA ANNOUNCEMENT REGARDING COMPLIANCE RULE 2-43