Closing Trades with FIFO
OANDA must follow a forex regulatory policy on how you close your trades
Starting May 30, 2011, OANDA is introducing “First In First Out” (FIFO), a forex trading policy that complies with National Futures Association (NFA) regulations. If you keep multiple open positions of the same size and same currency pair, this new trading policy may mean important changes to how you manage these trades.
What is FIFO and what does it mean to my trading?
In forex trading, FIFO is a requirement that you must close the first (or oldest) open trade when there are several open trades of the same pair and equal value.
What will happen when I try to close a trade?
You can tell which trades are oldest in the Trades table when you sort it by ticket number; the older trades have the lower ticket numbers.
You can still try to close any trade, but you will be warned if the oldest trade of the currency pair and unit size needs to be closed first. You will be given the option to close that oldest trade instead. Here is how the new interface works:
In the Trades table, you can still click any trade you want to close.
The trade ticket window appears, allowing you to modify or close the trade. (By default, it is set to close trades.)
When you click Submit:
If the trade is the oldest trade of the same currency pair and unit size, you receive a confirmation it was closed:
If the trade is not the oldest trade of the same currency pair and unit size, a message tells you the trade cannot be closed. You are given a choice to either close the oldest trade instead, or to cancel the request.
What is the NFA?
The National Futures Association (NFA) is an independent organization that regulates the U.S. futures industry. By law, all U.S. forex dealers must be registered Retail Foreign Exchange Dealer (RFED) with the U.S. Commodity Futures Trading Commission (CFTC). RFEDs must also be Forex Dealer Members (FDMs) of the National Futures Association. OANDA’s registration number with the NFA is 0325821.
First In First Out (FIFO) Examples
Example 1 — Multiple Open Trades of the same pair with the same number of units
In this example of four open trades, you can only close ticket 1234567890. It is the oldest trade (First In) of four trades all having the same size: 10,000 units. If you try to close any of the other three tickets, you will be prompted instead to close the oldest ticket, 1234567890.
Example 2 — Multiple Open Trades of the same pair with differing number of units
In this example of four open trades, you have the choice of closing tickets 1234567890 or 1234567891. Ticket 1234567890 is the oldest (First In) 5,000-unit trade. Ticket 1234567891 is the oldest 10,000-unit trade. If you try to close either of the other two tickets, you will be prompted to close the older ticket first.
The Commodity Futures Trading Commission (CFTC) limits leverage available to retail forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others. OANDA Asia Pacific offers maximum leverage of 50:1 on FX products and limits to leverage offered on CFDs apply. Maximum leverage for OANDA Canada clients is determined by IIROC and is subject to change. For more information refer to our regulatory and financial compliance section.