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Clarify: NFA-Forex-account vs. other USA accounts
#469294
11/10/17 14:50
11/10/17 14:50
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Posts: 1,730 Chicago
AndrewAMD
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What is an "NFA account"? If one reads the Zorro manual, one might think it simply means any account in the USA. I do not think this is so.
* FINRA regulates the (USA) stock market. * CFTC regulates the (USA) commodity market. * And finally, NFA regulates the (USA) futures and forex markets.
NFA stands for National Futures Association. Participating organizations are: * (USA) futures brokers * (USA) futures options brokers * (USA) forex brokers
The Zorro manual says all NFA accounts have to observe NFA Compliance Rule 2-43(b).
Actually, all NFA-regulated forex brokers must observe this rule.
Therefore: * USA stocks & options, etc. * USA futures & futures-options,
... are traded simply with orders to change a net position. In other words, "trades" are not a real thing, FIFO does not apply, and partial-closing is allowed because trades are irrelevant. And, technically, any order that puts my net position closer to or equal to zero is an order to close, regardless of how a "trade" ended.
**And**, depending on the broker, you can sometimes change the net position of an asset from net positive (long) to net negative (short) with a single trade.
Can the manual be modified to: * Clarify the distinction between NFA-forex regulations and other USA-style regulations? * Clarify how to handle the USA net-position style accounts, both from a Broker API and User-end perspective? (I assume I need virtual hedging with partial closing allowed, but I'm not sure.)
Thanks.
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Re: Clarify: NFA-Forex-account vs. other USA accounts
[Re: jcl]
#470615
01/25/18 00:01
01/25/18 00:01
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AndrewAMD
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partial closing is enabled for phantom trades But what about pool trades? Back to blaming the manual Here is Hedge: http://www.zorro-trader.com/manual/en/hedge.htmIf NFA is set, trades are not partially closed in Hedge = 5 mode, but are always fully closed. I sure hope this is incorrect, because this is odd. Why would partial closing be disallowed in Zorro's NFA mode?
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Re: Clarify: NFA-Forex-account vs. other USA accounts
[Re: jcl]
#470632
01/25/18 17:41
01/25/18 17:41
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Posts: 1,730 Chicago
AndrewAMD
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I don't know, but since it is in the manual, I fear it is most likely true. NFA switches off anything including partial closes. Do you agree that Zorro's NFA mode should not require this constraint, especially since this does not apply to all order-only (no-trade) accounts? I really would like this removed.
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Re: Clarify: NFA-Forex-account vs. other USA accounts
[Re: jcl]
#470634
01/25/18 18:17
01/25/18 18:17
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Posts: 1,730 Chicago
AndrewAMD
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