First in first out rule is nothing to be afraid of!
Today I will be talking about the first in first out issue that the traders from the United States have.
So I can say this post is oriented to the traders from the US. But if you’re not from the US and you don’t know what is the so-called FIFO rule or the first in first out, I would suggest you get familiar with because I’m pretty sure that this rule will be implemented in other countries.
Probably they will start with Australia, the UK, maybe Europe a little bit later. And it’s not really an issue. First of all, you can read a lot in the forums about people from the United States complaining that they cannot hedge and they cannot trade multiple strategies and Expert Advisors in one account.
But in this lecture, I will explain to you how you can do that. Especially how you can trade multiple strategies and multiple Expert Advisors in one account without breaking the first in first out rule. So I will explain what is the first in first out rule for the people that don’t know it.
First In First Out rule
Very simply, this is when you are trading many strategies or you want to open multiple trades on one currency pair. You need to close the trade that you opened first. First in first out. The first trade you opened, you should close it first as well.
So, for example, if you opened a trade based on strategy 1 then you open a trade based on strategy 2, you cannot close the trades beginning from Strategy 2. You should first close the trade from strategy 1. I guess this way it makes more sense and it’s easy to understand.
And most of the brokers in the United States refuse to open a second trade at all and you cannot hedge. You cannot open a buy position and a sell position at the same time because obviously, you will need to follow this FIFO rule or first in first out.
Now, when it comes to manual trading, you really don’t have issues because usually, you cannot trade more than 2-3 strategies at the same time. When you are doing it all manually and you have to follow the chart, it’s hard when you’re doing a couple of strategies.
It depends on the strategies that you use
When you’re trading with Expert Advisors as we do in Forex Academy, there is this issue. You cannot put just 100 Expert Advisors in one account or even 20 or 10 because it’s against the first in first out rule and the broker will not execute these trades.
What you can do in this case is to open a Demo account. First, you can do it on many accounts. You can install multiple Meta Trader accounts on your platform. And we have a topic in the forum on how you can do that. One of our traders used, I think, 32 Meta Traders in one machine and he explains that.
But having many Meta Trader platforms installed on the computer is pretty heavy.
It’s also a lot of work. So how can you do it on one account? You can open a Demo account and put each Expert Advisor with a different lot. So the first Expert Advisor, the first strategy, you can put with 0.01, then with 0.02, and so on. Obviously, you have a lot to go.
Our trusted brokers page
And when you follow the strategies’ performance in FX Blue, you should be looking not at the Net profit but at the Net pips.
Just arrange the Expert Advisors according to their performance, and scroll to the right to find the column with the pips.
This is because when you’re trading with different lots, the performance in pips is the same. This doesn’t break the first in first out rule. You will be able to trade many Expert Advisors in the account this way. From there, you can see which are the Expert Advisors that bring you most profit on a Demo account and you can put them into the live account.
This is what I show in most of my courses. Even in the free EA Studio course, I show how to use the FX Blue and how to follow the performance.
So this is really a great trick for the US traders. Now, the other issue is that US traders cannot find brokers which allow hedging.
One broker is FXChoice which we have listed in our trusted brokers’ page exactly for the reason that they allow US traders. I think they are located in Belize, I’m not really sure about that.
And the other broker which I know from my students in the US is Blueberry, I think from Australia, but I’ve never tested it. This is why we haven’t listed it in the trusted brokers page.
Beware of scam brokers
Basically, the trusted brokers page is only with the brokers that we have tested. I have personally tested them and I know that there are no issues when you want to withdraw money or when executing trades with Expert Advisors.
Keep in mind that there are no brokers in US that will break the First In FIrst Out rule. If they do – they are 99.9% scammers.
But once again, we don’t suggest these brokers. The idea of having the trusted brokers page was to avoid the scam brokers with the beginner traders. This is a huge issue as you know. We have a lot of scammers around. And daily, we receive questions – which broker should I be using? What is the best broker? Which is the broker that Petko uses?
The brokers that are listed on the page are the brokers that I have been using and so far I don’t have any issues. But if you have any suggestions about brokers which US traders can use for hedging and those that accept US traders, please put them in the comments and it will be very useful for everyone who is not able to find the broker for Expert Advisors.
So use that trick, use different lots when you are testing the Expert Advisors and you have no issue using EA Studio, and export an unlimited number of strategies.
Now, lastly, I want to say that the FIFO might be really smart.
The first in first out rule turns out to be a smart thing
Obviously, there were people in the United States that were thinking, much smarter people than me, I guess, about it for a long time and they implemented it. It protects the traders, obviously, because it’s a common mistake for people to just open randomly long and short trades, and they blow their accounts very quickly.
However, this is not a guarantee that you will not lose money because you can lose your money with a single trade. This is why I have recorded a special video all about money management. Please have a look at it
If you have liked the video, give it a like and subscribe to see more of our videos which I will be recording while traveling.