US Compliant Trader Accounts


#1

Coming%20to%20US-banner

ZuluTrade is soon opening up to the US Market!

However, Trading Rules have been set up by the US National Futures Association (NFA) that all Traders must adhere to.

Any Trader can join the Program and participate in the US Traders Program under the condition that his/her Trader account fully complies with the FIFO and No-Hedging market policy set up by NFA.

More specifically, Traders may either readjust their trading strategy to be compliant with the FIFO and No-Hedging policy, as described below, or they may open a new Trader account dedicated to the US Market only!

The US FIFO and No-Hedging Policy

FIFO stands for “First In, First Out”.

As per its norms, a Trader or Investor will have to close the oldest opened positions first, in case he or she is dealing in multiple trades of same size and pair.

FIFO assures that investors do not hold on to open positions for eternity while carrying out other trades on the same currency pair. This is brought about to keep the market active and hence its volatility. Often fluctuations stall due to open positions. FIFO looks to amend these possibilities and bring about a seamless and profitable trading experience.


FIFO Examples

1. Multiple Open Positions of the same pair with the SAME number of lots and lots size

A Trader places 3 Long positions on EUR/USD at different times and different entry rates.

Position 1: Bought EUR/USD 1 lot at 1.1200 entered on March 1
Position 2: Bought EUR/USD 1 lot at 1.1300 entered on March 2
Position 3: Bought EUR/USD 1 lot at 1.1400 entered on March 3

Total positions: 3 standard lots Long in EUR/USD

Now let’s say EUR/USD moved back to 1.1300 on March 4, and you wanted to close 1 lot of your overall position, more specifically the second position opened at 1.1300. Your Broker’s platform won’t allow you.

Under FIFO, the Broker has to sell back the first 1 lot that you purchased at 1.1200 because it was opened first. If you do decide to sell back 1 lot, you’d end up with Positions 2 and 3 in your trading account.


2. Multiple Open Positions of the same pair with different number of lots or lot size

A Trader places 4 Long positions on EUR/USD at different times and different entry rates.

Position 1: Bought EUR/USD 1 lot at 1.1200 entered on March 1
Position 2: Bought EUR/USD 0.7 lot at 1.1300 entered on March 2
Position 3: Bought EUR/USD 1 lot at 1.1400 entered on March 3
Position 4: Bought EUR/USD 0.3 lot at 1.1400 entered on March 4
Total Positions: 3 standard lots long in EUR/USD

Case1: If you wanted to close 0.3 lots with a market order, that 0.3 lots will be pulled from Position 1 because it is the oldest position.

Case 2: If you wanted to close 2 lots with a market order, it will cycle through the oldest trades first, leaving your with 0,7 lots in Position 3 and 0.3 lots in Position 4.

Case 3: If you wanted to close Position 4 manually, you can because there are no other positions of the same exact size older than Position 4. The same applies for Position 2.

Position 3 cannot be closed before Position 1. If you try to close Position 3, the platform will inform you that Position 1 needs to be closed first.

Finally, Hedging is not allowed under the FIFO policy, or opening opposite positions on the same currency pair. Because of the nature of FIFO, a new position in the opposite direction cannot be established until earlier opposite positions have been cleared out.

Get Ready for the US Version of ZuluTrade and be among the first to join our Traders Page! :slight_smile:


#2

Hello @ZuluTradeModerator,

This is truly excellent news and a major progress for the Zulutrade platform!!! Some of us have been waiting for a LONG time for this opportunity and I am truly happy to see it coming! Two questions:

  1. Can you provide any general timeline for when USA traders will be able to properly join?

  2. Will USA signal providers be able to trade with live dollar accounts?

Thank you!


#3

Hello @Orbital_Dynamics!

We were positive that you would like the news!
About your questions:

  1. Hopefully, we will be ready within summer but we are not in a position to define specific month.
  2. Yes as they will be able to use live accounts by certain regulated brokers.

We have repeatedly said that we are preparing to launch major projects and features.
Please be patient…

Regards,


#4

Need to readjust existing trading strategy to be compliant with the FIFO and No-Hedging policy.
Very Interesting. Thank you


#5

Hello @ZuluTradeModerator! So when I say, “I am FIFO compliant from now on!” I will be in the program? Or do I have to apply, or sign something, or show a X periods FIFO track record?


#6

Hello @Rothenstein_Trading,

Most probably, Traders will have to update their strategy to confirm they are FIFO compliant.
We will inform you accordingly how and when you will do this.
This is why we are informing all the Traders now. We want to give you enough time to be prepared with your trading. There will be real-time automation for screening all Traders’ activity.

Regards,


#7

I am usually a FOFI guy, but yes, FIFO works too! It´s just like pedalling backwards, instead of forward when you cycle. :wink:

www.zulutrade.com/trader/382066/trading


#8

Hello,

As Far as I can understand, my strategy comply with the above mentioned norms. Can you please have a look once and confirm?

https://www.zulutrade.com/trader/372706

Thanks in advanced

Regards


#9

Hello,

Does FIFO also applies to trades with preset TP limits? For example

Position 1: Bought EUR/USD 1 lot at 1.1200 entered on March 1 with TP of 1.1300 (100pips)
Position 2: Bought EUR/USD 1 lot at 1.1100 entered on March 2 with TP of 1.1200 (100pips)
Position 3: Bought EUR/USD 1 lot at 1.1000 entered on March 3 with TP of 1.1100 (100pips)

Now it is obvious that Position 3 would reach it’s TP level before Position 2 and Position 1. So would that be a violation of FIFO principle considering you did not manually close the trades?

Regards.


#10

Hi @JayDee10,

It doesn’t matter whether the positions are closed manually, with take profits, with stops or with Zuluscripts (or whatever other method you can imagine in Zulutrade), the example you gave would show up as a violation of FIFO rules.

If you are intending to trade within the FIFO framework, be very careful with exits as there are many possible scenarios will disqualify you. For example, if you have multiple trades open in the same currency pair but with the first with a fixed stop and the subsequent trades with trailing stops then it is very possible that the newer trades would close before the first one is closed!

All the best!


#11

I have determined that the solution to the FIFO problem is for me to use the correlated pairs. EUR/USD, GBP/USD, and AUD/USD. And I never have more than one trade (of various lot sizes) on at one time. This has worked great for me.


#12

What about if you have positions on different pairs?
For example

  1. EURUSD opened on June 1, 2019
  2. GBPUSD opened on June 2, 2019
  3. USDCAD opened on June 3, 2019

Can I close above position 3 first?


#13

The notice box about US Compliant trading that showed when I logged in wouldn’t allow me to agree to it in the Firefox web-browser and so I had to close it.

Please can you put a link in the members area so we can agree to US Compliant trading there, thanks.


#14

Hello!

FIFO rule applies on the same currency pair.

Regards,