FIFO and the RoboMiner or GT-Shadow

[PipCop]

This email was sent by Jerry from Forex Goldmine:

As most of you know, there has been a lot of concern about the upcoming FIFO regulations which are scheduled to take effect possibly as soon as July 31. I have been receiving numerous inquiries as to the effect of this regulation on traders who are trading the RoboMiner and/or GT-Shadow with U.S. brokers. I have resisted saying anything definitive until I get confirmation of what actually is going to take place from reliable sources.


First of all, I will say that up until yesterday, I had hoped that the situation would resolve itself as being a non-issue. I was a strong proponent of that, almost to the point of being bull-headed, and urged everyone to wait and see what would finally develop before making any hasty moves. We have finally gotten a clear, definite word from IBFX and the NFA on this issue. As of right now, it appears that I was wrong in my hopes, and that the issue will affect us, especially those of us with IBFX. To say that I am disappointed in this would be a great understatement. I am disappointed, not just because I was wrong in my previous assessment of the situation, but because of the impact that this rule is going to have on all of us. I will also say that it is my strong opinion that the situation has not been helped at all in the way that some brokers have attempted to profit from the need for traders to move their accounts overseas. While I blame no one for trying to make an honest profit, I also think that things have gotten somewhat distasteful, and I think that more could have been done to avoid this whole thing.

The bottom line is that, contrary to what we were told just a few weeks ago, IBFX is now saying that the rule will have an effect on trading the RoboMiner and GT-Shadow with them. They are attempting to come up with some ways around the situation, but unless your account is large enough so that you are trading at least .5 or 1.0 lots with them, it is likely that their fix will not be sufficient to allow you to stay with IBFX. All of this is still contingent upon the rule actually taking place on July 31, but at this point , it would be prudent to assume that is what will take place.

FXDD says that it will not affect their traders at all, since they are not members of the NFA. They do not plan to change anything as of the end of July, and so we can continue to trade as usual with FXDD. They also have some other contingency plans in the works in case they are needed in the future. I applaud FXDD for the stand that they are taking.

At this time, my best suggestion for IBFX users is that if your account is small, so that you have to trade small lot sizes, you may wish to consider moving your account, since their fix will likely not work for you.
For those who wish to move offshore to a UK account, you have more than one option, but I will tell you that forex.com has been very cooperative in working with us on this issue. Forex.com is a subsidiary of Gain Capital (who is used by TradeStation) so they bring a solid reputation to the table. They will give you a standard account with 200:1 leverage and with the ability to trade micro lots (.01 lots), which is very important to us.
Because they are based in the UK, you will not have to worry about any of the recent or new NFA regulations. They have given me the following link which will automatically streamline the opening of a Metatrader account with the options that we need. I used it myself, and was able to go through the entire account opening process in under 10 minutes. Here is the link:

https://secure.efxnow.com/NewOLS_MQU...BRUN&SIBC=BRUN

They do ask at one point who referred you to forex.com and if you want to mention me in that box, I would appreciate it, but if you don't, that is OK too.

Please understand that I do not make this suggestion lightly. I have appreciated IBFX over the past few years, and really hate that it has come to this. Again, if you are with FXDD, I do not believe it is necessary to move right now, according to what they are saying. If you are already with a non-US broker , then, of course, you are not affected by this at all. If you are with IBFX, however, it looks like you will need to seriously consider this option.

The question will naturally come up about what to do with your existing accounts and existing open trades. I will tell you what I have done in my IBFX account. I have set DoTrades to false, so that the RoboMiner will not open any additional trades in my IBFX account. I expect that when the time comes for the rule to go into effect, trades which are already open with a TakeProfit will likely be allowed to close at their existing TakeProfit point , and that the rule would only apply to new trades opened after that date. So I am going to attempt to let my trades close naturally as much as possible between now and then. Because I will not be opening any new trades, I will be transferring a portion of my balance out of that account, and will leave only enough to cover the trades that are remaining, with enough extra to account for additional price movement towards the outside.
I will leave it up to Bob to come up with more precise calculations in the next week or so, but depending on how many trades are open, it may only end up being $100 or so, for example, for every .01 lots in trade size in an IBFX mini account. If that is the case, it would end up being $1000 in a standard account. Hopefully, we will be able to provide you with a simple way of calculating the needed amount in the next week or so.

In the unlikely event that they say the new rule will effect even our existing trades, then I will be prepared to modify my TakeProfit points on each remaining trade to whatever the lowest TakeProfit is on the AUDNZD and whatever the highest TakeProfit is on the EURCHF, so that all trades would be closed at the same time when that price is reached. Even though it would take longer, we would end up with a larger profit when those trades do close.

If you are an IBFX trader, and for some reason, absolutely cannot or will not leave IBFX, then I will tell you that Bob and I have developed a new robot that we are naming the 'Forex Prospector' . This robot opens only 1 trade at a time, and so will not be affected by the FIFO rules. We would be happy to offer it at no cost as a replacement for the RoboMiner or GT-Shadow for anyone who feels that they must stay with IBFX.
We will be releasing more information about this in the coming weeks, and, for the rest of you, we are considering the possibility of making it available as an additional robot that you can purchase through our authorized resellers. However, as much as we like the Prospector, we still believe that your better option would be to move your account to forex.com and stay with the RoboMiner.

This is certainly a time of transition, and is what many would consider a sad time for Forex traders. I feel like we are witnessing the end of an era in Forex trading in the United States. I want to assure you that we are not going anywhere. Bob and I will continue to do whatever we can to help through this time.


Sincerely,

Jerry Brunet
Admin, Forex-Goldmine.com

[cogs]

Yes I received this also.

My concern is, if it effects me at all is I was told quite clearly some time ago that I cannot switch accounts with GT-Shadow, it has to remain with the same broker ?

[PipCop]

Originally Posted by cogs

Yes I received this also.

My concern is, if it effects me at all is I was told quite clearly some time ago that I cannot switch accounts with GT-Shadow, it has to remain with the same broker ?

You may change GTS and RM to a new account. The only requirement is to provide proof that your old account number was closed. Typically, that means whatever email you get from your broker support team showing the request to close the account and then the final result. Once you get that, you can email it to your reseller that you purchased from and we'll get you a new robot that will work on your new account (be sure to include your new account number).

The smart thing is to do it on a weekend so you don't have any down time.

[cogs]

Well it appears I/we can change accounts with GT-Shadow. I had this reply from Jerry @ Forex Goldmine.
Mind you this is the type of response you get after spending $1512.00AUD on his robots.

If I only offered minimal support, you would have never had your e-mail
answered to begin with. Your problem is that you didn't get your own
way, so now you whine like a baby. You will get your license transferred
to another account. Send the new account number to me, and I will
personally send you a new unlock code. That is how easy it will be.

Jerry

[PipCop]

Without seeing the whole email chain, it's hard to see why he's acting that way. Jerry has always been very professional with me and the rest of my clients.

With that said, anyone who has made a purchase through an authorized reseller, such as myself, should go through me. I am surprised he did take the time to get back to you, as he has always asked clients to go through their reseller instead of directly to him. It's like any other company setup, like Best Buy. Even though you may have bought a Samsung TV, you work with Best Buy and not Samsung directly.

[cogs]

He replied directly to me he sent an email directly out to me as with any other direct purchasers I guess.

[Samson]

I just received the following in Metatrader from IBFX... I don't if any of you have seen this?

Q. Does FIFO apply to all of my trades?
A. First in / First out applies ONLY to trades of the same size.

Q. Will my Expert Advisor still work?
A. All of your Expert Advisors will continue to work with all of your pre-programmed stops, limits and trailing stops.

Q. Will I still be able to use Stops and Limits, Trailing Stops and Take Profits?
A. Absolutely – With the IBFX solution, you won’t have to make any changes from the way that you are trading currently. No need to make any adjustments to Stops and Limits, Trailing Stops or Take Profits.

Q. Will I still be able to close any of my orders of the same currency pair in any order?
A. Yes, with the IBFX solution, your trading will still be fully functional without any changes to your current trading strategies.

Q. How will this affect my daily statements?
A. Interbank FX Official Statements will come directly from Interbank FX’s proprietary back office system using our FIFO offsetting and accounting procedures. These statements will be accessible through a client’s Web Site Login. You will still be able to pull an Unofficial Trade Journal using the Trade Journal feature within the IBFX website. You will also be able to produce Unofficial Trade Journals using MetaTrader 4 as your Trade Manager.

Q. Does this NFA rule apply to all U.S. based brokers?
A. Yes, this rule affects any broker in the U.S. that is a member of the NFA. Other brokers have attempted different approaches to this new ruling. We at Interbank FX strive to make trading in the forex market as simple as possible for our clients, all the while in full compliance with the NFA.

[jerrycollie]

IBFX has announced there will be no problem. Their back office will consolidate trades to comply with NFA's FIFO rule; but traders can continue to trade orders on MT4 the same as always, except no hedging. Only daily and monthly confirmations will show the difference. However, the new MT5 platform coming out this fall will be FIFO compliant. I expect IBFX and other brokers to run MT4 and MT5 in parallel.

[Samson]

I am new to trading, this is something additional I received from IBFX.com. Please let me know what you think?


Interbank FX Announces Compliance with the New NFA FIFO Rule, Retaining All Platform Order Functionality Including Expert Advisors

-Interbank FX’s proprietary backoffice solution offsets positions adhering to FIFO rule-

SALT LAKE CITY— July 20, 2009—Interbank FX (IBFX.com), a worldwide provider of online foreign currency (Forex/FX) trading, announced today a solution for NFA Compliance Rule 2-43 affecting all NFA regulated Forex brokers.

Using our proprietary backoffice solutions, Interbank FX will allow our Meta Trader 4 platform to remain 100 percent compliant, while retaining order functionality and flexibility for customers trading. The MT4 platform will continue to function as our customers have experienced over the last several years. This includes the ability for customers to use fully functional Expert Advisors, Stops Losses, Take Profits, Trailing Stops and Limit Orders without making any needed adjustments.

“Certain US competitors have decided that their solution to the new FIFO rules are to move their customers overseas, rather than being compliant,” said Todd Crosland, Chairman and President of Interbank FX. “At Interbank FX, we have embraced the NFA’s efforts to help protect customers and provide a seamless solution without any changes to their current trading strategies.”

The only modification for customers will be their daily and monthly account statements, coming directly from the proprietary Interbank FX backoffice system using NFA FIFO offsetting procedures. The FIFO rule takes effect beginning July 31/August 1, 2009.

Interbank FX is currently working on a step-by-step video which will be available shortly on our web site, www.ibfx.com.

[PipCop]

Well it's just the same as JerryCollie says - it doesn't affect the front end (MetaTrader). They just process the orders on the back end (their server) to be FIFO compliant.

If you upgrade to version II of RoboMiner you won't have to deal with losses. See www.forex-goldmine.biz and you can download the updated version at no charge. There is also a FAQ on how RM II differs etc.